Interpretation of Section 206(3) of the Investment Advisers Act of 1940

The Securities and Exchange Commission (``Commission'') is publishing two interpretive positions under Section 206(3) of the Investment Advisers Act of 1940. Section 206(3) prohibits any investment adviser from engaging in or effecting a transaction on behalf of a client while acting either as principal for its own account, or as broker for a person other than the client, without disclosing in writing to the client, before the completion of the transaction, the adviser's role in the transaction and obtaining the client's consent. The first interpretive position identifies the points at which an adviser may obtain its client's consent to a principal or agency transaction. The second interpretive position identifies certain transactions for which an adviser would not be acting as broker within the meaning of Section 206(3).