The Brochure Rule

Rule 204-3 under the Advisers Act, commonly referred to as the "brochure rule," generally requires every SEC-registered investment adviser to deliver to each client or prospective client a Form ADV Part 2A (brochure) and Part 2B (brochure supplement) describing the adviser's business practices, conflicts of interest and background of the investment adviser and its advisory personnel. An adviser must deliver the brochure to a client before or at the time the adviser enters into an investment advisory contract with a client. The rule also requires an adviser, if there are material changes in the brochure since the adviser's last annual updating amendment, to deliver annually, without charge, to each client within 120 days after the end of the adviser's fiscal year either (i) a current brochure or (ii) a summary of material changes to the brochure as required by Item 2 of the brochure that offers to provide the adviser's current brochure without charge, accompanied by the Web site address (if available) and an e-mail address (if available) and telephone number by which a client may obtain the current brochure from the adviser, and the Web site address for obtaining information about the adviser through the Investment Adviser Public Disclosure system. An adviser must deliver to each client or prospective client a current brochure supplement for a supervised person before or at the time that supervised person begins to provide advisory services to the client.

SEC-registered advisers are not required to deliver a brochure to either (i) clients that are SEC-registered investment companies or business development companies; or (ii) clients who receive only impersonal investment advice from the adviser and who will pay the adviser less than $500 per year. An SEC-registered adviser is not required to deliver a brochure supplement to a client (i) to whom it is not required to deliver a brochure, (ii) who receives only impersonal investment advice, or (iii) certain officers, and employees of the adviser.