When is an Investment Adviser Classified as a Holding Company under the FPA?
An investment adviser is required to obtain FERC authorization if it falls within the definition of a holding company. The definition of a holding company is found in the Public Utility Holding Company Act of 2005 (PUHCA). Pursuant to PUHCA, any company that directly or indirectly owns, controls, or holds, with voting power, 10 percent or more of the voting securities of a utility or utility holding company is considered a holding company. Horizon, a registered investment adviser, argued that it should not be treated as a holding company since the account holders and not Horizon held the voting securities of the utility companies in question. Horizon directed certain of its account holders to purchase 10 percent or more of the voting securities of Reliant Energy, Inc., Sierra Pacific Power, and Aquila, Inc. at a time when certain of Horizon’s accounts under advisement already held more than 10 percent of the voting securities of Aquila, Inc. These account holders in turn delegated thei
Related Questions
- Does a registered investment adviser have to obtain personal securities holding and transaction reports if the access person does not have any reportable securities holdings or transactions?
- When is an Investment Adviser Classified as a Holding Company under the FPA?
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