Investment Advisers Act ABC test
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Definition
A person is an investment adviser if they give Advice about securities, are in the Business of doing so, and receive Compensation.
Investment Advisers Act ABC test in plain English
Someone blogs stock tips, sells a newsletter, and takes subscription fees, then claims the work is "just educational." Under the Investment Advisers Act ABC test, a person is an investment adviser if they give Advice about securities, are in the Business of doing so, and receive Compensation. Miss any prong and the IA label may not stick; meet all three and registration or an exemption analysis follows. Scope Breach answers ignore whether all three prongs are actually present in the facts.
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