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RULE §116.11Disclosure Requirement/Brochure Rule

All registered investment advisers must deliver to all clients or prospective clients a written disclosure statement that may be:

  (1) either Part 2 of Form ADV, Uniform Application for Investment Adviser Registration, or another disclosure statement which contains at least the information disclosed on Part 2 of Form ADV as effective on October 12, 2010 (17 Code of Federal Regulations §279.1); or

  (2) a disclosure statement containing at least the information required by Part 2A Appendix 1 and Part 2B of Form ADV, Uniform Application for Investment Adviser Registration, if the investment adviser is the sponsor, or the sponsor and the portfolio manager, of a wrap fee program that the client will enter into.

  (3) The disclosure statement shall be delivered to a client or prospective client either:

    (A) not less than 48 hours prior to entering into any written or oral investment advisory contract with such client or prospective client; or

    (B) at the time of entering into any such contract, if the advisory client has the right to terminate the contract without penalty within five business days after entering into the contract.

  (4) On an annual basis, the Part 2 of Form ADV or other disclosure statement satisfying the requirements of paragraph (1) or (2) of this section must be provided to all customers, or in the alternative, the investment adviser must offer the client the right to receive such Part 2 of Form ADV or other disclosure statement.

Source Note: The provisions of this §116.11 adopted to be effective August 12, 2001, 26 TexReg 5799; amended to be effective March 9, 2011, 36 TexReg 1473; amended to be effective April 7, 2013, 38 TexReg 2098

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