Commission Interpretation Regarding the Solely Incidental Prong of the Broker-Dealer Exclusion From the Definition of Investment Adviser

AGENCY:

Securities and Exchange Commission.

ACTION:

Interpretation.

SUMMARY:

The Securities and Exchange Commission (the “SEC” or the “Commission”) is publishing an interpretation of a section of the Investment Advisers Act of 1940 (the “Advisers Act” or the “Act”), which excludes from the definition of “investment adviser” any broker or dealer that provides advisory services when such services are “solely incidental” to the conduct of the broker or dealer's business and when such incidental advisory services are provided for no special compensation.

DATES:

Effective July 12, 2019.

FOR FURTHER INFORMATION CONTACT:

James McGinnis, Senior Counsel, Investment Adviser Regulation Office, at (202) 551-6787 or IArules@sec.gov; and Benjamin Kalish, Attorney-Advisor, or Parisa Haghshenas, Branch Chief, Chief Counsel's Office at (202) 551-6825 or IMOCC@sec.gov, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549.

SUPPLEMENTARY INFORMATION:

The Commission is publishing an interpretation of the solely incidental prong of the broker-dealer exclusion in section 202(a)(11)(C) of the Advisers Act [15 U.S.C. 80b].

Table of Contents

I. Introduction

II. Interpretation and Application

A. Historical Context and Legislative History

B. Scope of the Solely Incidental Prong of the Broker-Dealer Exclusion

C. Guidance on Applying the Interpretation of the Solely Incidental Prong

III. Economic Considerations

A. Background

B. Potential Economic Effects

I. Introduction

The Advisers Act regulates the activities of certain “investment advisers,” who are defined in section 202(a)(11) of the Advisers Act in part as persons who, for compensation, engage in the business of advising others about securities. Section 202(a)(11)(C) excludes from the definition of investment adviser—and thus from the application of the Advisers Act—a broker or dealer “whose performance of such advisory services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation” for those services (the “broker-dealer exclusion”). The broker-dealer exclusion shows, on the one hand, that at the time the Advisers Act was enacted Congress recognized broker-dealers commonly provided some investment advice to their customers in the course of their business as broker-dealers and that it would be inappropriate to bring broker-dealers within the scope of the Advisers Act because of this aspect of their business. On the other hand, the limitations of the exclusion show that Congress excluded broker-dealer advisory services from the scope of the Advisers Act only under certain circumstances—namely, when those services are solely incidental to the broker-dealer's regular business as a broker-dealer (the “solely incidental prong”) and when the broker-dealer receives no special compensation (the “special compensation prong”).

On April 18, 2018, the Commission proposed a rulemaking intended to enhance the standard of conduct for broker-dealers when providing recommendations. The Commission also proposed an interpretation intended to reaffirm and in some cases clarify the standard of conduct for investment advisers, as well as a rulemaking intended to provide retail investors with clear and succinct information regarding key aspects of their brokerage and advisory relationships. The Reg. BI Proposal discussed the broker-dealer exclusion and requested comment on the scope of the exclusion as applied to a broker-dealer's exercise of investment discretion. While some commenters addressed when a broker-dealer's advisory services are “solely incidental to the conduct of his business as a broker or dealer” in the context of the exercise of investment discretion, more commenters addressed this prong more generally. For example, many commenters requested general guidance on or expressed views about the meaning of the solely incidental prong and the permissibility under this prong of various broker-dealer activities that relate to the investment advice they provide in light of the Reg. BI Proposal and the Relationship Summary Proposal. Other commenters suggested that our approach to the Reg. BI Proposal was inconsistent with the solely incidental prong of the broker-dealer exclusion. One commenter suggested that the Reg. BI Proposal, if adopted, would allow broker-dealers to provide investment advice beyond what the solely incidental prong should “reasonably be interpreted to permit,” arguing that to qualify for exclusion from regulation under the Advisers Act, broker-dealers should only “be able to provide very limited advice. . . .” Two commenters thought that the Commission's expressed support for maintaining the “broker-dealer model as an option for retail customers seeking investment advice” was inconsistent with the solely incidental prong. Another commenter called the Commission's previously articulated interpretation of the solely incidental prong “vague.” The comments we received demonstrate that there is disagreement about when the provision of broker-dealer investment advice is consistent with the solely incidental prong. In light of these comments, we are adopting this interpretation to confirm and clarify the Commission's position with respect to the solely incidental prong. To illustrate how the interpretation functions, we discuss its application to two advisory services that a broker or dealer may provide, namely: (i) Exercising investment discretion over customer accounts and (ii) account monitoring. Our interpretation complements each of the rules and forms we are adopting, which, among other things, are intended individually and collectively to enhance investor understanding of the relationships and services offered by investment advisers and broker-dealers.

II. Interpretation and Application

A. Historical Context and Legislative History

When the Advisers Act was enacted in 1940, broker-dealers regularly provided investment advice. They did so in two distinct ways: As an auxiliary part of traditional brokerage services for which their brokerage customers paid fixed commissions and, alternatively, as a distinct advisory service for which their advisory clients separately contracted and paid a fee. The advice that broker-dealers provided as an auxiliary component of traditional brokerage services was referred to as “brokerage house advice” in a leading study of the time. “Brokerage house advice” was extensive and varied, and included information about various corporations, municipalities, and governments; broad analyses of general business and financial conditions; market letters and special analyses of companies' situations; information about income tax schedules and tax consequences; and “chart reading.” The second way in which broker-dealers dispensed advice was to charge a distinct fee for advisory services, which typically were provided through special “investment advisory departments” within broker-dealer firms that advised customers for a fee in the same manner as firms whose sole business was providing “investment counsel” services.

Between 1935 and 1939, the Commission conducted a congressionally mandated study of investment trusts and investment companies and in connection with this study surveyed investment advisers, including broker-dealers with investment advisory departments. In a report to Congress (the “Investment Counsel Report”), the Commission informed Congress that the Commission's study had identified two broad classes of problems relating to investment advisers that warranted legislation: “(a) The problem of distinguishing between bona fide investment counselors and `tipster' organizations; and (b) those problems involving the organization and operation of investment counsel institutions.” Based on the findings of the Investment Counsel Report, representatives of the Commission testified at the congressional hearings on what ultimately became the Advisers Act in favor of regulating the persons engaged in the business of providing investment advice for compensation.

Congress responded by passing the Advisers Act. Section 202(a)(11) of the Act defined “investment adviser”—those subject to the requirements of the Act—broadly to include “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. . . .” In adopting this broad definition, Congress necessarily rejected arguments presented during its hearings that legitimate investment counselors should be free from any oversight except, perhaps, by the few states that had passed laws regulating investment counselors and by private organizations, such as the Investment Counsel Association of America. Instead, in responding to such views, congressional committee members repeatedly observed that those whose business was limited to providing investment advice for compensation were subject to little if any regulatory oversight, and questioned why they should not be subject to regulation even though other professionals were.

Conversely, the Advisers Act specifically excluded persons, among others, from the broad definition of “investment adviser” to the extent that such persons rendered investment advice incidental to their primary business. Broker-dealers were among these excluded persons, as section 202(a)(11)(C) of the Act excludes from the definition of “investment adviser” a broker-dealer who provides investment advice that is “solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefor”—i.e., the broker-dealer exclusion.

B. Scope of the Solely Incidental Prong of the Broker-Dealer Exclusion

The Commission and its staff have on several occasions discussed the scope of the broker-dealer exclusion. In adopting a rule regarding fee-based brokerage accounts in 2005, for example, the Commission stated that investment advisory services are “solely incidental to” the conduct of a broker-dealer's business when the services are offered in connection with and are reasonably related to the brokerage services provided to an account. The interpretation was consistent with the Commission's contemporaneous construction of the Advisers Act as excluding broker-dealers whose investment advice is given “solely as an incident of their regular business.” The 2005 interpretation stated that the importance or frequency of the investment advice was not a determinant of whether the solely incidental prong was satisfied; the Commission rejected the view that only minor, insignificant, or infrequent advice qualifies for the broker-dealer exclusion, noting that the advice broker-dealers gave as part of their brokerage services in 1940 was often substantial and important to customers.

On March 30, 2007, the Court of Appeals for the District of Columbia Circuit in Financial Planning Association v. SEC vacated the rule regarding fee-based brokerage accounts, but not on grounds that addressed our interpretive positions relating to the solely incidental prong. In September 2007, we proposed to reinstate these interpretive positions.

Since that time, a federal appellate court has addressed the solely incidental prong. In 2011, in Thomas v. Metropolitan Life Insurance Company, the Court of Appeals for the Tenth Circuit addressed the scope of the broker-dealer exclusion in the context of a private suit alleging that a broker had violated the Advisers Act by failing to disclose incentives to sell proprietary products. As part of its analysis of the exclusion, the court looked to the interpretation of the solely incidental prong that we advanced in 2005 and 2007. The court found these interpretations to be “persuasive” in light of its own analysis of the text of the solely incidental prong of the broker-dealer exclusion as well as the legislative history and historical background of the Advisers Act. The court concluded that a broker-dealer's investment advice is solely incidental to its conduct as a broker-dealer if the advice is given “only in connection with the primary business of selling securities.” Thus, the court explained, “broker-dealers who give advice that is not connected to the sale of securities—or whose primary business consists of giving advice—do not meet the [solely incidental] prong” of the broker-dealer exclusion. The court also agreed with the Commission's interpretations that the solely incidental prong does not hinge upon “the quantum or importance” of a broker-dealer's advice but on its relationship to the broker-dealer's primary business. In the court's view, “[t]he quantum or importance of the broker-dealer's advice is relevant only insofar as the advice cannot supersede the sale of the product as the `primary' goal of the transaction or the `primary' business of the broker-dealer.”

Based on the text and history of the solely incidental prong, our previous interpretations of the prong, the Thomas decision, and the comments we have received, we are providing the following interpretation. We interpret the statutory language to mean that a broker-dealer's provision of advice as to the value and characteristics of securities or as to the advisability of transacting in securities is consistent with the solely incidental prong if the advice is provided in connection with and is reasonably related to the broker-dealer's primary business of effecting securities transactions. If a broker-dealer's primary business is giving advice as to the value and characteristics of securities or the advisability of transacting in securities, or if the advisory services are not offered in connection with or are not reasonably related to the broker-dealer's business of effecting securities transactions, the broker-dealer's advisory services are not solely incidental to its business as a broker-dealer. Whether advisory services provided by a broker-dealer satisfy the solely incidental prong is assessed based on the facts and circumstances surrounding the broker-dealer's business, the specific services offered, and the relationship between the broker-dealer and the customer.

The quantum or importance of investment advice that a broker-dealer provides to a client is not determinative as to whether or not the provision of advice is consistent with the solely incidental prong. Advice need not be trivial, inconsequential, or infrequent to be consistent with the solely incidental prong. Indeed, our simultaneous adoption of (i) Regulation Best Interest, which raises the standard of conduct that applies to broker-dealer recommendations, and (ii) the relationship summary, which provides information about broker-dealer recommendation services to customers, underscores that broker-dealer investment advice can be consequential even when it is offered in connection with and reasonably related to the primary business of effecting securities transactions.

To illustrate the application of this interpretation in practice, we provide the following guidance on the application of the interpretation to (i) exercising investment discretion over customer accounts and (ii) account monitoring.

C. Guidance on Applying the Interpretation of the Solely Incidental Prong

1. Investment Discretion

The Commission has for many years considered issues related to a broker-dealer's exercise of investment discretion over customer accounts and the extent to which such practices could be considered solely incidental to the business of a broker-dealer. The Commission has stated that discretionary brokerage relationships “have many of the characteristics of the relationships to which the protections of the Advisers Act are important.” In particular, the Commission has explained that when a broker-dealer exercises investment discretion, it is not providing advice to customers that is in connection with and reasonably related to effecting securities transactions; rather, the broker-dealer is making investment decisions relating to the purchase or sale of securities on behalf of customers on an ongoing basis. At the same time, the Commission has taken the position that some limited exercise of discretionary authority by broker-dealers could be considered solely incidental to their business.

We requested comment in the Reg. BI Proposal on a broker-dealer's exercise of investment discretion over customer accounts and the extent to which the exercise of investment discretion should be considered solely incidental to the business of a broker-dealer. Commenters agreed that the exercise of unlimited discretion should not be considered “solely incidental” investment advice. Commenters expressed varying views, however, on the extent to which the exercise of temporary or limited discretion could be considered solely incidental to the business of a broker-dealer. Several commenters suggested that the exercise of any investment discretion should be governed by the Advisers Act. One commenter suggested that the Commission should interpret the solely incidental prong through the lens of the definition of “investment discretion” in section 3(a)(35) of the Securities Exchange Act of 1934 (the “Exchange Act”), noting that section 3(a)(35) focuses on “the level of authority, decision-making ability, influence—and ultimately, control—an intermediary has over another's money” and arguing that those with section 3(a)(35) investment discretion have a heightened likelihood of mismanagement and abuse of another's money. Another commenter suggested that, while discretion generally should subject a broker-dealer to the Advisers Act, there are certain cases where temporary or limited discretion does not have the supervisory or managerial character of the investment discretion warranting the protections of the Advisers Act.

Applying our interpretation of the solely incidental prong, a broker-dealer's exercise of unlimited discretion would not be solely incidental to the business of a broker-dealer consistent with the meaning of section 202(a)(11)(C). It would be inconsistent with the solely incidental prong for broker-dealers to exercise “investment discretion” as that term is defined in section 3(a)(35) of the Exchange Act with respect to any of its accounts, except for certain instances of investment discretion granted by a customer on a temporary or limited basis, as discussed below. A broker-dealer with unlimited discretion to effect securities transactions possesses ongoing authority over the customer's account indicating a relationship that is primarily advisory in nature; such a level of discretion by a broker-dealer is so comprehensive and continuous that the provision of advice in such context is not incidental to effecting securities transactions.

We recognize, however, that there are situations where a broker-dealer may exercise temporary or limited discretion in a way that is not indicative of a relationship that is primarily advisory in nature. Generally, these are situations where the discretion is limited in time, scope, or other manner and lacks the comprehensive and continuous character of investment discretion that would suggest that the relationship is primarily advisory. The totality of the facts and circumstances would be relevant to determining whether temporary or limited discretion is consistent with the solely incidental prong. Taking into consideration specific examples that commenters have suggested in the past, instances of temporary or limited investment discretion that, standing alone, would not support the conclusion that a relationship is primarily advisory—and therefore outside the scope of the solely incidental prong—include discretion: (i) As to the price at which or the time to execute an order given by a customer for the purchase or sale of a definite amount or quantity of a specified security; (ii) on an isolated or infrequent basis, to purchase or sell a security or type of security when a customer is unavailable for a limited period of time; (iii) as to cash management, such as to exchange a position in a money market fund for another money market fund or cash equivalent; (iv) to purchase or sell securities to satisfy margin requirements, or other customer obligations that the customer has specified; (v) to sell specific bonds or other securities and purchase similar bonds or other securities in order to permit a customer to realize a tax loss on the original position; (vi) to purchase a bond with a specified credit rating and maturity; and (vii) to purchase or sell a security or type of security limited by specific parameters established by the customer. We view these examples of temporary or limited discretion as typically consistent with the broker-dealer exclusion because they are in connection with and reasonably related to a broker-dealer's business of effecting securities transactions and do not suggest that the broker-dealer's primary business is providing investment advice.

We have previously described a similar list of situations that we would consider temporary or limited discretion that may be consistent with the solely incidental prong. We make three refinements.

First, we are not including authority for a period “not to exceed a few months” relating to the time a broker-dealer may purchase or sell a security or type of security when a customer is unavailable for a limited period of time. Depending on the facts and circumstances, a period of discretion lasting a few months may be indicative of a business or customer relationship that is primarily advisory in nature.

Second, we would view it as consistent with our interpretation of the solely incidental prong for broker-dealers to purchase or sell securities to satisfy margin requirements, or other customer obligations that the customer has specified (new wording italicized). In our view, there may be similar obligations to a broker-dealer or a third party whereby a broker-dealer may be authorized to make a purchase or sale, such as a sale to satisfy a collateral call.

Third, we would view it as consistent with our interpretation of the solely incidental prong for broker-dealers to sell specific bonds or other securities in order to permit a customer to realize a tax loss on the original position (new wording italicized). We see no distinction between bonds or other securities in this particular context.

2. Account Monitoring

We received several comments regarding the extent to which a broker-dealer may monitor the status and performance of a customer's account while relying on the broker-dealer exclusion. Some commenters suggested that a broker-dealer's agreement to provide ongoing monitoring for the purpose of recommending changes to a customer's investments is not an advisory service that is solely incidental to the primary securities transaction business of a broker-dealer and thus the broker-dealer exclusion should not be available to broker-dealers who provide such services. Another commenter suggested that broker-dealers providing personalized investment advice about securities on an ongoing basis should not be able to rely on the broker-dealer exclusion. Commenters also suggested that providing services that cause overseen assets to meet the definition of “regulatory assets under management” under Form ADV (i.e., securities portfolios for which the broker-dealer provides “continuous and regular supervisory or management services”) should subject a broker-dealer to the Advisers Act.

We disagree with commenters who suggested that any monitoring of customer accounts would not be consistent with the solely incidental prong. A broker-dealer that agrees to monitor a retail customer's account on a periodic basis for purposes of providing buy, sell, or hold recommendations may still be considered to provide advice in connection with and reasonably related to effecting securities transactions. In contrast, when a broker-dealer, voluntarily and without any agreement with the customer, reviews the holdings in a retail customer's account for the purposes of determining whether to provide a recommendation to the customer—and, if applicable, contacts that customer to provide a recommendation based on that voluntary review—the broker-dealer's actions are in connection with and reasonably related to the broker-dealer's primary business of effecting securities transactions. Absent an agreement with the customer (which would be required to be disclosed pursuant to Regulation Best Interest), we do not consider this voluntary review to be “account monitoring.”

We decline to delineate every circumstance where agreed-upon monitoring is and is not solely incidental to a broker-dealer's brokerage business. Broker-dealers may consider adopting policies and procedures that, if followed, would help demonstrate that any agreed-upon monitoring is in connection with and reasonably related to the broker-dealer's primary business of effecting securities transactions. For example, broker-dealers may include in their policies and procedures that a registered representative may agree to monitor a customer's account at specific time frames (e.g., quarterly) for the purpose of determining whether to provide a buy, sell, or hold recommendation to the customer. However, such policies and procedures should not permit a broker-dealer to agree to monitor a customer account in a manner that in effect results in the provision of advisory services that are not in connection with or reasonably related to the broker-dealer's primary business of effecting securities transactions, such as providing continuous monitoring. Additionally, dually registered firms may similarly consider adopting policies and procedures that distinguish the level and type of monitoring in advisory and brokerage accounts.

The Commission will consider further comment on its interpretation of the solely incidental prong of the broker-dealer exclusion and its application to certain brokerage activities to evaluate whether additional guidance might be appropriate in the future. Based on any comments received, the Commission may, but need not, supplement this interpretation.

III. Economic Considerations

The Commission's interpretation above is intended to advise the public of its understanding of the solely incidental prong of the broker-dealer exclusion. The interpretation does not itself create any new legal obligations for broker-dealers. Nonetheless, the Commission recognizes that to the extent a broker-dealer's practices are not consistent with this interpretation of the solely incidental prong, the interpretation could have potential economic effects. We discuss these effects below.

A. Background

The Commission's interpretation regarding the solely incidental prong of the broker-dealer exclusion would affect broker-dealers and their associated persons as well as the customers of those broker-dealers, and the market for financial advice more broadly. As of December 2018, there were approximately 3,764 registered broker-dealers with over 140 million customer accounts. In total, these broker-dealers have over $4.3 trillion in total assets, which are total broker-dealer assets as reported on Form X-17a-5. Of the broker-dealers registered with the Commission as of December 2018, 363 broker-dealers were dually registered with the Commission as investment advisers. Dual registrant firms hold over 90 million (63%) of the overall 140 million customer accounts held by broker dealers. As part of the Reg. BI Proposal, we requested data and other information related to the nature and magnitude of discretionary services offered by broker-dealers, but did not receive any data or information to inform our analysis of potential economic effects stemming from this interpretation.

B. Potential Economic Effects

Broker-dealers currently incur ongoing costs related to compliance with their legal and regulatory obligations, including costs related to understanding their practices and structuring their practices to be consistent with the solely incidental prong of the broker-dealer exclusion. This interpretation generally confirms the scope of the solely incidental prong of the broker-dealer exclusion.

Generally, we believe that few, if any, broker-dealers take the view that they act consistently with the solely incidental prong with respect to any accounts over which the broker-dealer exercises more than temporary or limited investment discretion. As with other circumstances in which the Commission speaks to the legal obligations of regulated entities, we acknowledge that affected firms, including those whose practices are consistent with the Commission's interpretation, incur costs to evaluate the Commission's interpretation and assess its applicability to them. Further, to the extent certain broker-dealers currently understand the scope of permissible monitoring or other permissible advisory activities under the solely incidental prong to be different from what is set forth in this interpretation, there could be some economic effects.

This interpretation may produce economic effects to the extent that it causes any broker-dealers to recognize that their practices are inconsistent with the solely incidental prong and to adjust their practices to make them consistent. In particular, broker-dealers that have interpreted the solely incidental prong to conduct more advisory activities than this interpretation permits may choose to no longer provide such services to customers. This could result in a loss of certain customers, a reduction in certain business activities, and could preclude those broker-dealers from further developing certain services for their customers, except to the extent those broker-dealers are dually registered firms and their customers are also advisory clients. This may, in turn, result in decreased competition in the market for certain services, increased fees for those services, or a diminished number of broker-dealers offering commission-based services to investors.

To the extent any broker-dealers have been providing advisory services beyond the scope of this interpretation, their customers may receive fewer advisory services if these broker-dealers choose not to register as investment advisers and adjust their business practices in light of this interpretation. To the extent that this interpretation would lead to a decline in the supply of certain services offered by broker-dealers (or a decline in broker-dealers offering services to particular customers), it could reduce the efficiency of portfolio construction for those investors who might otherwise benefit from broker-dealers providing investment advice with respect to their account and would find similar advice from investment advisers to be too costly or unattainable (e.g., due to account minimum requirements). For example, certain broker-dealers may incur costs to adopt or revise policies and procedures to ensure that the account monitoring that they may agree to provide their customers is consistent with this interpretation and may choose instead to stop offering such monitoring services. Further, to the extent that any broker-dealers determine that their services are not consistent with this interpretation, they may choose to register as investment advisers with the Commission, or one or more states, as applicable. Such broker-dealers would bear costs in choosing to register as investment advisers to continue providing those services, and their clients may face higher fees as a result. Alternatively, broker-dealers that have investment adviser affiliates may seek to place existing customers in advisory accounts instead of brokerage accounts.

Broker-dealers that determine they must change business practices as a result of this interpretation will choose their responses based on their circumstances. For example, if broker-dealers with affiliated advisers are able to utilize their existing regulatory infrastructure and compliance policies and procedures to account for activities that are inconsistent with the solely incidental exclusion they may face lower costs associated with migration of brokerage accounts and activities to investment advisory accounts. By contrast, we expect the costs of regulatory registration and compliance to be greater for any standalone broker-dealers that choose to become registered investment advisers, as they are more likely to need to undertake new systems, procedures, and policies.

To the extent that broker-dealers choose to discontinue providing certain services, register as investment advisers, or encourage migration of customer's brokerage accounts to advisory accounts of affiliates, this interpretation could result in a shift in the demand for the services of different types of financial service providers, decreasing the demand for services of broker-dealers and increasing the demand for the services of investment advisers.⁸¹

This interpretation may also produce some overall economic effects to the extent that it causes any broker-dealers that to date have avoided performing limited discretion and other activities to recognize that they may perform such activities consistent with the solely incidental prong of the broker-dealer exclusion. Such broker-dealers may respond to this interpretation by increasing the amount of limited discretionary services or monitoring services that they agree to provide to their customers. Investors that have established relationships with such broker-dealers may benefit from more efficient access to these services and may demand these services from broker-dealers rather than becoming clients of investment advisers. While additional provision of these services by broker-dealers also raises the risk of regulatory arbitrage because similar activities would be regulated under different regimes, we believe this risk will be mitigated by the adoption of rules that enhance the standard of conduct that applies to broker-dealer recommendations.

List of Subjects in 17 CFR Part 276

• Securities

Amendments to the Code of Federal Regulations

For the reasons set out above, the Commission is amending title 17, chapter II of the Code of Federal Regulations as set forth below:

PART 276—INTERPRETATIVE RELEASES RELATING TO THE INVESTMENT ADVISERS ACT OF 1940 AND GENERAL RULES AND REGULATIONS THEREUNDER

1. Part 276 is amended by adding Release No. IA-5249 and the release date of June 5, 2019, to the end of the list of interpretive releases to read as follows: