Proposed Chages

APPENDIX C
GLOSSARY OF TERMS
1. Advisory Affiliate: Your advisory affiliates are (1) all of your officers, partners, or directors
(or any person performing similar functions); (2) all persons directly or indirectly controlling
or controlled by you; and (3) all of your current employees (other than employees performing
only clerical, administrative, support or similar functions).
If you are a “separately identifiable department or division” (SID) of a bank, your advisory
affiliates are: (1) all of your bank’s employees who perform your investment advisory
activities (other than clerical or administrative employees); (2) all persons designated by your
bank’s board of directors as responsible for the day-to-day conduct of your investment
advisory activities (including supervising the employees who perform investment advisory
activities); (3) all persons who directly or indirectly control your bank, and all persons
whom you control in connection with your investment advisory activities; and (4) all other
persons who directly manage any of your investment advisory activities (including directing,
supervising or performing your advisory activities), all persons who directly or indirectly
control those management functions, and all persons whom you control in connection with
those management functions. [Used in: Part 1A, Items 7, 11, DRPs; Part 1B, Item 2]
2. Annual Updating Amendment: Within 90 days after your firm’s fiscal year end, your firm
must file an “annual updating amendment,” which is an amendment to your firm’s Form
ADV that reaffirms the eligibility information contained in Item 2 of Part 1A and updates the
responses to any other item for which the information is no longer accurate. [Used in:
General Instructions; Part 1A Instructions, Introductory Text, Item 2; Part 2A, Instructions,
Appendix 1 Instructions; Part 2B, Instructions]
3. Borrowings: Borrowings include secured borrowings and unsecured borrowings,
collectively. Secured borrowings are obligations for borrowed money in respect of which the
borrower has posted collateral or other credit support and should include any reverse repos
(i.e. any sale of securities coupled with an agreement to repurchase the same (or similar)
securities at a later date at an agreed price). Unsecured borrowings are obligations for
borrowed money in respect of which the borrower has not posted collateral or other credit
support. [Used in: Part 1A, Instructions, Item 5, Schedule D]
4. Brochure: A written disclosure statement that you must provide to clients and prospective
clients. See SEC rule 204-3; Form ADV, Part 2A. [Used in: General Instructions; Used
throughout Part 2]
5. Brochure Supplement: A written disclosure statement containing information about certain
of your supervised persons that your firm is required by Part 2B of Form ADV to provide to
clients and prospective clients. See SEC rule 204-3; Form ADV, Part 2B. [Used in:
General Instructions; Used throughout Part 2]
6. Charged: Being accused of a crime in a formal complaint, information, or indictment (or
equivalent formal charge). [Used in: Part 1A, Item 11; DRPs]

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7. Client: Any of your firm’s investment advisory clients. This term includes clients from which
your firm receives no compensation, such as family members of your supervised persons. If
your firm also provides other services (e.g., accounting services), this term does not include
clients that are not investment advisory clients. [Used throughout Form ADV and Form ADVW]
8. Commodity Derivative: Exposures to commodities that you do not hold physically, whether
held synthetically or through derivatives (whether cash or physically settled). [Used in: Part
1A, Schedule D]
9. Control: The power, directly or indirectly, to direct the management or policies of a person,
whether through ownership of securities, by contract, or otherwise.
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Each of your firm’s officers, partners, or directors exercising executive responsibility (or
persons having similar status or functions) is presumed to control your firm.

•

A person is presumed to control a corporation if the person: (i) directly or indirectly has
the right to vote 25 percent or more of a class of the corporation’s voting securities; or (ii)
has the power to sell or direct the sale of 25 percent or more of a class of the corporation’s
voting securities.

•

A person is presumed to control a partnership if the person has the right to receive upon
dissolution, or has contributed, 25 percent or more of the capital of the partnership.

•

A person is presumed to control a limited liability company (“LLC”) if the person: (i)
directly or indirectly has the right to vote 25 percent or more of a class of the interests of
the LLC; (ii) has the right to receive upon dissolution, or has contributed, 25 percent or
more of the capital of the LLC; or (iii) is an elected manager of the LLC.

•

A person is presumed to control a trust if the person is a trustee or managing agent of the
trust.

[Used in: General Instructions; Part 1A, Instructions, Items 2, 7, 10, 11, 12, Schedules A, B,
C, D, R; DRPs]
10. Credit Derivative: Single name credit default swap, including loan credit default swap,
credit default swap referencing a standardized basket of credit entities, including credit
default swap indices and indices referencing leverage loans, and credit default swap
referencing bespoke basket or tranche of collateralized debt obligations and collateralized
loan obligations (including cash flow and synthetic) other than mortgage backed
securities. [Used in: Part 1A, Schedule D]

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11. Custody: Holding, directly or indirectly, client funds or securities, or having any
authority to obtain possession of them. You have custody if a related person holds,
directly or indirectly, client funds or securities, or has any authority to obtain possession
of them, in connection with advisory services you provide to clients. Custody includes:
● Possession of client funds or securities (but not of checks drawn by clients and made
payable to third parties) unless you receive them inadvertently and you return them to
the sender promptly, but in any case within three business days of receiving them;
● Any arrangement (including a general power of attorney) under which you are
authorized or permitted to withdraw client funds or securities maintained with a
custodian upon your instruction to the custodian; and
● Any capacity (such as general partner of a limited partnership, managing member of a
limited liability company or a comparable position for another type of pooled
investment vehicle, or trustee of a trust) that gives you or your supervised person
legal ownership of or access to client funds or securities.
[Used in: Part 1A, Item 9; Part 1B, Instructions, Item 2; Part 2A, Items 15, 18]
12. Discretionary Authority or Discretionary Basis: Your firm has discretionary authority
or manages assets on a discretionary basis if it has the authority to decide which
securities to purchase and sell for the client. Your firm also has discretionary authority if
it has the authority to decide which investment advisers to retain on behalf of the client.
[Used in: Part 1A, Instructions, Item 8; Part 1B, Instructions; Part 2A, Items 4, 16, 18;
Part 2B, Instructions]
13. Employee: This term includes an independent contractor who performs advisory
functions on your behalf. [Used in: Part 1A, Instructions, Items 1, 5, 11; Part 2B,
Instructions]
14. Enjoined: This term includes being subject to a mandatory injunction, prohibitory
injunction, preliminary injunction, or a temporary restraining order. [Used in: Part 1A,
Item 11; DRPs]
15. Equity Derivative: Includes both listed equity derivative and derivative exposure to
unlisted securities. Listed equity derivative includes all synthetic or derivative exposure to
equities, including preferred equities, listed on a regular exchange. Listed equity derivative
also includes a single stock future, equity index future, dividend swap, total return swap
(contract for difference), warrant and right. Derivative exposure to unlisted equities
includes all synthetic or derivative exposure to equities, including preferred equities, that
are not listed on a regulated exchange. Derivative exposure to unlisted securities also

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includes a single stock future, equity index future, dividend swap, total return swap
(contract for difference), warrant and right. [Used in: Part 1A, Schedule D]
16. Exempt Reporting Adviser: An investment adviser that qualifies for the exemption from
registration under section 203(l) of the Advisers Act because it is an adviser solely to one
or more venture capital funds, or under rule 203(m)-1 of the Advisers Act because it is an
adviser solely to private funds and has assets under management in the United States of
less than $150 million. [Used in: Throughout Part 1A; General Instructions; Form
ADV-H; Form ADV-NR]
17. Felony: For jurisdictions that do not differentiate between a felony and a misdemeanor, a
felony is an offense punishable by a sentence of at least one year imprisonment and/or a
fine of at least $1,000. The term also includes a general court martial. [Used in: Part 1A,
Item 11; DRPs; Part 2A, Item 9; Part 2B, Item 3]
18. Filing Adviser: An investment adviser eligible to register with the SEC that files (and
amends) a single umbrella registration on behalf of itself and each of its relying
advisers. [Used in: General Instructions; Part 1A, Items 1, 2, 3, 10 and 11; Schedule R]
19. FINRA CRD or CRD: The Web Central Registration Depository (“CRD”) system
operated by FINRA for the registration of broker-dealers and broker-dealer representatives.
[Used in: General Instructions, Part 1A, Item 1, Schedules A, B, C, D, R, DRPs; Form
ADV-W, Item 1]
20. Foreign Exchange Derivative: Any derivative whose underlying asset is a currency other
than U.S. dollars or is an exchange rate. Cross-currency interest rate swaps should be
included in foreign exchange derivatives and excluded from interest rate derivatives.
[Used in: Part 1A, Schedule D]
21. Foreign Financial Regulatory Authority: This term includes (1) a foreign securities
authority; (2) another governmental body or foreign equivalent of a self-regulatory
organization empowered by a foreign government to administer or enforce its laws relating
to the regulation of investment-related activities; and (3) a foreign membership
organization, a function of which is to regulate the participation of its members in the
activities listed above. [Used in: Part 1A, Items 1, 11; DRPs; Part 2A, Item 9; Part 2B,
Item 3]
22. Found: This term includes adverse final actions, including consent decrees in which the
respondent has neither admitted nor denied the findings, but does not include agreements,
deficiency letters, examination reports, memoranda of understanding, letters of caution,
admonishments, and similar informal resolutions of matters. [Used in: Part 1A, Item 11;
Part 1B, Item 2; Part 2A, Item 9; Part 2B, Item 3]

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23. Government Entity: Any state or political subdivision of a state, including (i) any
agency, authority, or instrumentality of the state or political subdivision; (ii) a plan or
pool of assets controlled by the state or political subdivision or any agency, authority, or
instrumentality thereof; and (iii) any officer, agent, or employee of the state or political
subdivision or any agency, authority, or instrumentality thereof, acting in their official
capacity. [Used in: Part 1A, Item 5]
24. Gross Notional Value: The gross nominal or notional value of all transactions that have
been entered into but not yet settled as of the reporting date. For contracts with variable
nominal or notional principal amounts, the basis for reporting is the nominal or notional
principal amounts as of the reporting date. For options, use delta adjusted notional value.
[Used in: Part 1A, Schedule D]
25. High Net Worth Individual: An individual who is a qualified client or who is a
“qualified purchaser” as defined in section 2(a)(51)(A) of the Investment Company Act of
1940. [Used in: Part 1A, Item 5; Schedule D]
26. Home State: If your firm is registered with a state securities authority, your firm’s “home
state” is the state where it maintains its principal office and place of business. [Used in:
Part 1B, Instructions]
27. Impersonal Investment Advice: Investment advisory services that do not purport to meet
the objectives or needs of specific individuals or accounts. [Used in: Part 1A, Instructions;
Part 2A, Instructions; Part 2B, Instructions]
28. Independent Public Accountant: A public accountant that meets the standards of
independence described in rule 2-01(b) and (c) of Regulation S-X (17 CFR 210.2-01(b) and
(c)). [Used in: Item 9; Schedule D]
29. Interest Rate Derivative: Any derivative whose underlying asset is the obligation to pay or
the right to receive a given amount of money accruing interest at a given rate. Crosscurrency interest rate swaps should be included in foreign exchange derivatives and
excluded from interest rate derivatives. [Used in: Part 1A, Schedule D]
30. Investment Adviser Representative: Any of your firm’s supervised persons (except those
that provide only impersonal investment advice) is an investment adviser representative, if
•

the supervised person regularly solicits, meets with, or otherwise communicates with
your firm’s clients,

•

the supervised person has more than five clients who are natural persons and not high
net worth individuals, and

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more than ten percent of the supervised person’s clients are natural persons and not
high net worth individuals.

NOTE: If your firm is registered with the state securities authorities and not the SEC, your
firm may be subject to a different state definition of “investment adviser
representative.” Investment adviser representatives of SEC-registered advisers may be
required to register in each state in which they have a place of business.
[Used in: General Instructions; Part 1A, Item 5; Part 2B, Item 1]
31. Investment Grade: A security is investment grade if it is sufficiently liquid that it can be
sold at or near its carrying value within a reasonably short period of time and is subject to
no greater than moderate credit risk. [Used in: Part 1A, Schedule D]
32. Investment-Related: Activities that pertain to securities, commodities, banking,
insurance, or real estate (including, but not limited to, acting as or being associated with an
investment adviser, broker-dealer, municipal securities dealer, government securities
broker or dealer, issuer, investment company, futures sponsor, bank, or savings
association). [Used in: Part 1A, Items 7, 11, Schedule D, DRPs; Part 1B, Item 2; Part 2A,
Items 9 and 19; Part 2B, Items 3, 4 and 7]
33. Involved: Engaging in any act or omission, aiding, abetting, counseling, commanding,
inducing, conspiring with or failing reasonably to supervise another in doing an act. [Used
in: Part 1A, Item 11; Part 2A, Items 9 and 19; Part 2B, Items 3 and 7]
34. Legal Entity Identifier: A “legal entity identifier” assigned or recognized by the Global
LEI Regulatory Oversight Committee (ROC) or the Global LEI Foundation (GLEIF).
[Used in: Part 1A, Item 1, Schedules D, R]
35. Management Persons: Anyone with the power to exercise, directly or indirectly, a
controlling influence over your firm’s management or policies, or to determine the
general investment advice given to the clients of your firm.
Generally, all of the following are management persons:
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Your firm’s principal executive officers, such as your chief executive officer, chief
financial officer, chief operations officer, chief legal officer, and chief compliance
officer; your directors, general partners, or trustees; and other individuals with similar
status or performing similar functions;

•

The members of your firm’s investment committee or group that determines general
investment advice to be given to clients; and

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If your firm does not have an investment committee or group, the individuals who
determine general investment advice provided to clients (if there are more than five
people, you may limit your firm’s response to their supervisors).

[Used in: Part 1B, Item 2; Part 2A, Items 9, 10 and 19]
36. Managing Agent: A managing agent of an investment adviser is any person, including a
trustee, who directs or manages (or who participates in directing or managing) the affairs of
any unincorporated organization or association that is not a partnership. [Used in: General
Instructions; Form ADV-NR; Form ADV-W, Item 8]
37. Minor Rule Violation: A violation of a self-regulatory organization rule that has been
designated as “minor” pursuant to a plan approved by the SEC. A rule violation may be
designated as “minor” under a plan if the sanction imposed consists of a fine of $2,500 or
less, and if the sanctioned person does not contest the fine. (Check with the appropriate
self-regulatory organization to determine if a particular rule violation has been designated
as “minor” for these purposes.) [Used in: Part 1A, Item 11]
38. Misdemeanor: For jurisdictions that do not differentiate between a felony and a
misdemeanor, a misdemeanor is an offense punishable by a sentence of less than one year
imprisonment and/or a fine of less than $1,000. The term also includes a special court
martial. [Used in: Part 1A, Item 11; DRPs; Part 2A, Item 9; Part 2B, Item 3]
39. Net Asset Value: With respect to any client, the gross assets of the client’s accounts
minus any outstanding indebtedness or other accrued but unpaid liabilities. [Used in: Part
1A, Item 5]
40. Non-Investment Grade: A security is non-investment grade if it is not an investment
grade security. [Used in: Part 1A, Schedule D]
41. Non-Resident: (a) an individual who resides in any place not subject to the jurisdiction of
the United States; (b) a corporation incorporated in or that has its principal office and
place of business in any place not subject to the jurisdiction of the United States; and (c) a
partnership or other unincorporated organization or association that is formed in or has its
principal office and place of business in any place not subject to the jurisdiction of the
United States. [Used in: General Instructions; Form ADV-NR]
42. Notice Filing: SEC-registered advisers may have to provide state securities authorities
with copies of documents that are filed with the SEC. These filings are referred to as
“notice filings.” [Used in: General Instructions; Part 1A, Item 2; Execution Page(s); Form
ADV-W]

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43. Order: A written directive issued pursuant to statutory authority and procedures, including
an order of denial, exemption, suspension, or revocation. Unless included in an order, this
term does not include special stipulations, undertakings, or agreements relating to
payments, limitations on activity or other restrictions. [Used in: Part 1A, Items 2 and 11;
Schedules D, R; DRPs; Part 2A, Item 9; Part 2B, Item 3]
44. Other derivative: Any derivative that is not a commodity derivative, credit derivative,
equity derivative, foreign exchange derivative or interest rate derivative. [Used in:
Part 1A, Schedule D]
45. Parallel Managed Account: With respect to any registered investment company or
business development company, a parallel managed account is any managed account or
other pool of assets that you advise and that pursues substantially the same investment
objective and strategy and invests side by side in substantially the same positions as the
identified investment company or business development company that you advise. [Used
in: Part 1A, Schedule D]
46. Performance-Based Fee: An investment advisory fee based on a share of capital gains
on, or capital appreciation of, client assets. A fee that is based upon a percentage of assets
that you manage is not a performance-based fee. [Used in: Part 1A, Item 5; Part 2A, Items
6 and 19]
47. Person: A natural person (an individual) or a company. A company includes any
partnership, corporation, trust, limited liability company (“LLC”), limited liability
partnership (“LLP”), sole proprietorship, or other organization. [Used throughout Form
ADV and Form ADV-W]
48. Principal Office and Place of Business: Your firm’s executive office from which your
firm’s officers, partners, or managers direct, control, and coordinate the activities of your
firm. [Used in: Part 1A, Instructions, Items 1 and 2; Schedules D, R; Form ADV-W, Item
1]
49. Private Fund: An issuer that would be an investment company as defined in section 3 of
the Investment Company Act of 1940 but for section 3(c)(1) or 3(c)(7) of that Act. [Used
in: Part 1A, Items 2, 5, 7, and 9; Schedule D; General Instructions; Part 1A, Instructions].
50. Proceeding: This term includes a formal administrative or civil action initiated by a
governmental agency, self-regulatory organization or foreign financial regulatory
authority; a felony criminal indictment or information (or equivalent formal charge); or a
misdemeanor criminal information (or equivalent formal charge). This term does not
include other civil litigation, investigations, or arrests or similar charges effected in the
absence of a formal criminal indictment or information (or equivalent formal charge).
[Used in: Part 1A, Item 11; DRPs; Part 1B, Item 2; Part 2A, Item 9; Part 2B, Item 3]

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51. Qualified Client: A client that satisfies the definition of qualified client in SEC rule
205-3. [Used in: Schedule D ; General Instructions]
52. Related Person: Any advisory affiliate and any person that is under common control
with your firm. [Used in: Part 1A, Items 7, 8, 9; Schedule D; Form ADV-W, Item 3; Part
2A, Items 10, 11, 12, 14; Part 2A, Appendix 1, Item 6]
53. Relying Adviser: An investment adviser eligible to register with the SEC that relies on a
filing adviser to file (and amend) a single umbrella registration on its behalf. [Used in:
General Instructions; Part 1A, Items 1, 7, 11; Schedule D; Schedule R ]
54. Self-Regulatory Organization or SRO: Any national securities or commodities
exchange, registered securities association, or registered clearing agency. For example, the
Chicago Board of Trade (“CBOT”), FINRA and New York Stock Exchange (“NYSE”) are
self-regulatory organizations. [Used in: Part 1A, Item 11; DRPs; Part 1B, Item 2; Part
2A, Items 9 and 19; Part 2B, Items 3 and 7]
55. Sovereign Bonds: Any notes, bonds and debentures issued by a national government
(including central government, other governments and central banks but excluding U.S.
state and local governments), whether denominated in a local or foreign currency. [Used
in: Part 1A, Schedule D]
56. Sponsor: A sponsor of a wrap fee program sponsors, organizes, or administers the
program or selects, or provides advice to clients regarding the selection of, other
investment advisers in the program. [Used in: Part 1A, Item 5; Schedule D; Part 2A,
Instructions, Appendix 1 Instructions]
57. State Securities Authority: The securities commissioner or commission (or any agency,
office or officer performing like functions) of any state of the United States, the District of
Columbia, Puerto Rico, the Virgin Islands, or any other possession of the United States.
[Used throughout Form ADV]
58. Supervised Person: Any of your officers, partners, directors (or other persons occupying
a similar status or performing similar functions), or employees, or any other person who
provides investment advice on your behalf and is subject to your supervision or control.
[Used throughout Part 2]
59. Umbrella Registration: A single registration by a filing adviser and one or more
relying advisers who collectively conduct a single advisory business and that meet the
conditions set forth in General Instruction 5. [Used in: General Instructions; Part 1A,
Items 1, 2, 3, 7, 10 and 11; Schedule D; Schedule R]

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60. United States person: This term has the same meaning as in rule 203(m)-1 under the
Advisers Act, which includes any natural person that is resident in the United States.
[Used in: Part 1A, Instructions; Item 5; Schedule D]
61. Wrap Brochure or Wrap Fee Program Brochure: The written disclosure statement that
sponsors of wrap fee programs must provide to each of their wrap fee program clients.
[Used in: Part 2, General Instructions; Used throughout Part 2A, Appendix 1]
62. Wrap Fee Program: Any advisory program under which a specified fee or fees not based
directly upon transactions in a client’s account is charged for investment advisory services
(which may include portfolio management or advice concerning the selection of other
investment advisers) and the execution of client transactions. [Used in: Part 1, Item 5;
Schedule D; Part 2A, Instructions, Item 4, used throughout Appendix 1; Part 2B,
Instructions]