SEC Division of Investment Management staff letter: Sacha Stawski

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SECURITIES AND EXCHANGE COMMISSION JNU ·

WASHINGTON. D.C. 20549

.JIVISION OF . f' -: It . ..... ____..

INVESTMENT MANAGEMENT tLvÜON _ ~ß.2)llÇ'

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PUBLI k . August 9, 1996
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Mr. Sacha Stawski

99 Pond Avenue, #613

Brookline, MA 02146

Dear Mr. Stawski:
Your letter of May 31, 1996, has been referred to the

Di vision of Investment Management for response. In your

letter, you state that your company intends to establish a

subsidiary in the United States. You state that this

subsidiary will provide trading recommendations and analysis

via fax and internet related services to financial

insti tutions, corporations and private investors in the U. S.

You request information regarding registration requirements

for such activities.

The Commission regulates investment aavisers primarily under the Investment Advisers Act of 1940 ("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

investing in, purchasing, or selling securities, or who

issues or promulgates analyses or reports concerning

securities. Section 203 (a) of the Advisers Act requires an

investment adviser that uses the U. s. mails, telephone

lines, or other interstate means of communication, in

connection with its business as an investment adviser, to

register under the Advisers Act.

Although we do not have sufficient information upon

which to base a determination, you should be aware that

activities such as providing trading recommendations and

analysis to U. s. investors may bring the proposed subsidiary

within the definition of investment adviser if compensation

is received, directly or indirectly, for such activities. I

am enclosing for your information several letters issued by

the Division on the question of whether information relating

to securities constitutes an analysis or report concerning

securities for purposes of Section 202 (a) (11) . You may

1 See,~, Datastream International (pub. avail. Mar. 15, 1993); Investex Investment Exchange Inc. (pub. avail. April 9,1990).

Mr. Sacha Stawski

August 9, 1996

wish to review these letters to determine whether the

information provided by the proposed subsidiary would fall

within the statutory language as interpreted by the staff.

In addition, you should note that Section 202 (a) (11) (D)

of the Advisers Act excludes from the definition of

investment adviser any publisher of a bona fide newspaper,

news magazine or business or fin~ncial publication of

general and regular circulation. To qualify for the

exclusion under Section 202 (a) (11) (D), a publication must:
(1) offer only impersonalized advice, i. e., advice not

tailored to the individual needs of a specific

client or group of clients;

(2) be "bona fide" or genuine, in that it contains

disinterested commentary and analysis as opposed

to promotional material; and

(3) be of general and regular circulation, i.e., not

timed to specific market activity or to events

affecting or having ~he ability to affect the

securities industry.

The staff generally declines to express a view on

whether a person would qualify for the exclusion because

this is primarily a factual, rather than a legal,

determination. If you meet the definition of an investment

adviser 'under the Advisers Act but do not qualify for the

publisher i s exclusion, or for any other exclusion from the definition of investment adviser, or for an exemption from

registration under Section 203 (b), you m~st register with

the Commission as an investment adviser. I have enclosed

with this letter a copy of the Commission i s Investment

Adviser Registration Package, which contains the forms

2 A person who provides advice about securities using a fax machine or the internet may qualify for the publisher IS exclusion.

3 See SEC v. Lowe, 472 U.S. 181 (1985).

4 The exclusions from the definition of an investment

adviser are set forth in Section 202 (a) (11) of the Advisers

Act. Section 203 (b) contains four limited exemptions from

registration. However, you should note that if an adviser

uses a publicly available electronic medium such as a World

Wide Web site to provide information about its services, the

adviser would not qualify for the exemption from

registration in Section 203 (b) (3) of the Advisers Act. See

Investment Company Act Release No. 21945 (May 15, 1996).

Mr. Sacha Stawski

August 9, 1996

necessary to register as an investment adviser should you

determine it necessary to do so, as well as a copy of the

Advisers Act, the rules under that Act, and other

supplemental information, including Release No. 1092, which

discusses the definition of an investment adviser in more detail. In addition to regulation under federal law, individual

states also regulate investment advisers. The names and

addresses of state officials can be obtained by contacting

the North American Securities Administrators Association,

Inc., One Massachusetts Avenue, N.W., Suite 310, Washington,

D.C. 20001, Telephone: (202) 737-0900.

We recommend that you consult an attorney who is

familiar with the U. S. federal securities laws. I hope that

you find this information helpful. If you have any further

questions, please contact this office at (202) 942 - 0659.

~~ rl
Sanjay 'L~/
Law Clerk

Enclosurès

From: Sacha Stawski To: S.E.C. Date: 5/31/96 Time: 16:31:30 Page 1 of 1 . ' NiTo U.S.A. 304 Newbury Street. Suite 226 Boston, MA 02115-2832

FAX￾Tel 1-617 -650-5433

Fax 1-617-264-7468

USA
A DIVISION OF NITO GMBH GERMANY' COVER PAGE To: S.E.C. For information call: Sacha Stawski Fax: 1-202-6289001 Company: NiTo GmbH

• Date: 5/31/96 Time: 16:30:48' At: '
  Subject: Information Fax: ~ "- .

Dear Sir / Madam,

V'. '/ould be grateful, if you could fax (or sefid) us information on SEe registration requirements,

Jing all the required application/registration documentation). We are a German company looking to establish a US subsidiary. We do not trader or broker ourselves, but provide trading recommendations and analysis via a number of different fax and Internet related services for financial institutions, corporates and private investors. Please use the above stated fax number (and address). Office of Filings

Faithfully, and Information Services ,JUN 1 1 1996

Sacha Stawski. Publiç Reference Branch (A~9 \ \9lO ""Exclusive Distributors of The Burmese Tiger