SEC Division of Investment Management staff letter: RDM Infodustries, Inc.

A(f TfTA- .
UNITED STATES £AL.
8~ION ~a()l.(a)Ci~

SECURITIES AND EXCHANGE COMMISSIONRULE
WASHINGTON. D.C. 20549 PUBL::'J 3 'ì ~ a/ AVAILABILITY oL.) I ~ DIVISION OF

INVESTMENT MANAGEMENT
March 25, 1996

Mr. Terence Horvath

c/o RDM Infodustries, Inc.

3006 N. Ricardo

Mesa, AZ 85215

Re: Request for No-Action Relief Submitted by RDM Infodustries. Inc. ("RDM") (Our Ref. No. 96-100) Dear Mr. Horvath:

On February 26, 1996, we received your letter seeking

a financial data service company ("RDM")

that you are creating would be required to register as an

investment adviser under the Investment Advisers Act of 1940

(hereafter "Advisers Act"). You state that the purpose of RDM's

proposed business is to provide "raw, unbiased financial data"

g.uidance as to whether

American corporations to stockbrokers and

securities dealers within the United States.

regarding Latin

RDM's proposed activities may raise an issue under the Advisers Act.1 Section 203 (a) of the Advisers Act requires an investment adviser that utilizes the United States mails or any

other means or instrumentality of interstate commerce in

connection with its business as an investment adviser to register under the Advisers Act. Section 202 (a) (11), in pertinent part, defines the term "investment adviser" to.mean any person who, for

compensation, engages in the business of advising others as to

the value of securities or as to the advisability of~inyesting

in, purchasing, or selling securities, or who issues or

promulgates analyses or reports concerning securitiès. As we

discussed in our telephone conversation on March 8, 1996, your

letter does not present sufficient facts upon which to make a

determination whether RDM must register under the Advisers Act.

We express no view with regard to whether RDM' s

activities constitute offers to sell unregistered securities

under the Securities Act of 1933 or may require it to register as

a broker or dealer under the Securities Exchange Act of 1934.

For further information with respect to these issues, you may

contact the Division of Corporation Finance at (202) 942-2900 and

the Division of Market Regulation, at (202) 942-0073, respectively.

Mr. Terence Horvath

March 25, 1996

The staff of the Division of Investment Management, in a

numer of letters, has expressed its views regarding the

circumstances when the presentation of securities data or

informtion constitutes an analysis or report for purposes of

section 202 (a) (11). The staff has taken the position that

information relating to securities does not constitute an

analysis or report if: (1) the informtion is readily available

to the public in its raw state; (2) the categories of information

presented are not highly selective; and (3) the informtion is

not organized or presented in a manner that suggests the

purchase, holding, or sale of any security or securities. See,

~, Missouri Innovation Center, Inc. (pub. avail. Oct. 17,

1995) ("Missouri Innovation"); Datastream International (pub.

avail. Mar. 15, 1993); EJV Partners, L.P.; Univu System (pub.

avail. Dec. 7, 1992). I have enclosed copies of the three no-

action letters cited above to assist you in determining whether

RDM's activities fall within the parameters established by

earlier precedent.

Finally, the Division of Investment Management, having

repeatedly expressed its views regarding the circumstances in

which the presentation of securities information constitutes an

analysis or report concerning securities for purposes of section 202 (a) (11), will no longer respond to such requests for interpretative or no-action letters in this area unless they

present novel or unusual issues. See Missouri Innovation,

supra.2 If you determine from reading the enclosed letters,

however, that RDM's proposed system and acti vi ties can meet the test articulated in earlier no-action letters, you may rely on

these letters to conclude that RDM need not register under the

Advisers Act.
I have also enclosed, for your convenience, an Investment

Adviser Annual Registration Updating Package, which contains a

copy of the Advisers Act and rules, a registration form for

2 The Division also has issued other no-action letters in

this area. See also Media
General Financial Services, Inc. (pub. avail. July 20, 199.2); Investex Investment Exchange, Inc. (pub. avail. Apr. 9, 1990); Charles Street Securities, Inc. (pub. avail. Feb. 27, 1987); Butcher & Singer, Inc. (pub. avail. Jan. 2, . 1987) .

Mr. Terence Horvath

March 25, 1996

investment advisers (Form ADV) and other explanatory materials.

Please contact me at (202) 942 - 0660 if you have any further

questions. In addition, you may wish to consult counsel

knqwledgeable about the federal securities laws.

S:icerely, tJ /Ì ,. Eileen M. Smiley

Senior Counsel

Enclosure

RDM INFODUSTRIES, INC.
3006 N. Ricardo, Mesa, AZ 85215
Securities and Exchange Commssion
450 5th Street N.W.
Washington D.C. 20549
Attention: Chief Counsel - Investment Management Subject: Proposed Financial Data Servce Business - Required Registration By The Securities Exchange Commssion (SEC)l'No Action" Request Dear Sir:
RDM Infodustries, Inc. is comprised of 4 graduate students currently conducting research in support of our Masters thesis which is the development of a business plan for a proposed fiancial data servce company, Currently, we are in the early planng stages of developing this company which would be based in Phoeni Arona. The basis of this

proposed business is to provide raw, unbiased fiancial data from Latin American corporations to stockbrokers and securities dealers withi the Unites States of America. The brokers and dealers would then utilze this raw information in support of their investment decisions without further input from RDM Infodustries, Inc. RDM Inodustries, Inc. is in no way interested in trading or exchanging any securities or financial instruments governed by the SEC. Weare only interested in providing raw financial data from the Latin American corporation to the individual investment professional. Therefore, what we seek from the Securities Exchange Commssion is your written opinion regarding "No Action" or whether our proposed business would come under SEC regulation. If it would, in the opinion of the SEC, please advise what regulation our proposed business would fall under so we may research this requirement. We understand that the SEC receives many requests such as this one every day, however, if your written response could be issued no later than 24 March i 996, it would be very much appreciated. Sincerely, ~ Ø1$A~

RDM Infodustries, Inc.:
Mr. Gar Douglas

Mr. Ted Haas
Mr. Terr Horvath

Mr. Manuel Moreno