Utah Admin. Code 164-2-5

Current through Bulletin 2024-23, December 1, 2024

Section R164-2-5 - Client Requirements

A client entering into a contract must be:

(1) a natural person or a company who, immediately after entering into the contract, has at least $1,100,000 under the management of the investment adviser;

(2)

(a) a person who the investment adviser and investment adviser representatives reasonably believe is a natural person or a company whose net worth when the contract is entered into exceeds $2,200,000;

(b) to calculate the net worth of a natural person:

(i) assets held jointly with that person's spouse may be included;

(ii) the person's primary residence shall not be included as an asset;

(iii)

(A) any debt secured by the primary residence up to the estimated fair market value of the residence shall not be deducted as a liability;

(B) but if the amount of the outstanding debt at the time of calculation exceeds the amount outstanding 60 days before the time of calculation, other than as a result of the acquisition of the primary residence, the amount of such excess shall be deducted as a liability; and

(iv) any debt secured by a person's primary residence in excess of the estimated market value of the residence shall be deducted as a liability;

(3) a qualified purchaser as defined in Section 2(a)(51)(A) of the Investment Company Act of 1940 when the contract is entered into; or

(4) a natural person who immediately before entering into the contract is:

(a) an executive officer, director, trustee, general partner, or person serving in a similar capacity of the investment adviser; or

(b) an employee of the investment adviser other than an employee performing solely clerical, secretarial or administrative functions with regard to the investment adviser who, in connection with the employee's regular functions or duties, participated in the investment activities of such investment adviser if the employee has been performing such functions and duties for or on behalf of the investment adviser, or has been performing substantially similar functions or duties for or on behalf of another company for at least 12 months.

Utah Admin. Code R164-2-5

Adopted by Utah State Bulletin Number 2022-07, effective 3/11/2022