standard Participating Affiliate Agreement

16. In addition, updating the information requires the participating Affiliate to accept the jurisdiction of the U.S. courts for acts that are directly or indirectly a result of U.S. or national securities law, while participating affiliate letters do not contain direct or indirect language. The updated information also indicates that changes to one of the above information can also be forwarded to the email address above. While most of the disclosure guidelines are consistent with the commitments and obligations required by the participating affiliated letters, it appears to have broadened the interpretation of the participating affiliate letters to the extent that it requires the participating subsidiary to represent that it is competent not only for the acts of U.S. securities law. , but also for the deeds of government securities legislation. In its non-action response, the Staff stated, referring to the “behaviour and impact test,” that the physical provisions of the Advisers Act generally did not apply to non-U.S. clients of a registered foreign consultant, but that the SEC advisor should grant access to foreign personnel for all of his activities inside and outside the United States and keep certain records. In addition, the Staff found that Unibanco was sufficiently separated from its registered consulting subsidiary, so that Unibanco would not be considered an indirect supply service to U.S. clients in violation of the Consultants Act, although the registered foreign consultant subsidiary would rely primarily on Unibanco`s research and that some Unibanco employees would also be employees of the registered foreign consultant. The General Staff stated that separation would be recognized if (i) related businesses are organized separately; (ii) the registered consultant employs staff (based in the U.S.

or abroad) who can provide investment advice; (iii) all persons participating in the advice to U.S. clients are considered “associates”[11] of the registered advisor; and (iv) the SEC, on appropriate access to the commercial and other records of any subsidiary involved in the consulting activities in the United States and the staff of each of these related companies, to the extent necessary for the SEC to identify conduct that could harm U.S. customers or markets. Prior to issuing the affiliate letters, a foreign consultant wishing to provide investment advice to U.S. clients without registering under the Advisers Act had to form a separate and independent registered subsidiary to do so. The decision to consider a foreign consultant as separate and independent of a registered affiliate consultant was based on several factors listed in a series of letters without action. These factors were eventually consolidated in a five-factor test (the “integration test”) published in 1981 in a letter without legal action against Richard Ellis, Inc. and certain related companies.

The integration test asks whether each subsidiary (i) is properly capitalized; (ii) a cushion, for example. B a board of directors, the majority of whose members are independent of the other related company, between the staff of each related company; (iii) has staff, senior executives and directors who, when advising on the day-to-day operations of the related company, are not employed in the investment advisory activities of the other related company; (iv) makes its own decisions about investment advice that is communicated or used on behalf of its clients and uses sources of investment information that are not limited to those of the other related company; and (v) treats their investment advice confidentially until such advice is provided to their clients.