Virginia Law

A. For purposes of this section, "agency cross transaction" means a transaction in which an investment advisor, or any person controlling, controlled by, or under common control with such investment advisor, including an investment advisor representative, acts as a broker-dealer for both the advisory client and the person on the other side of the transaction.

B. An investment advisor effecting an agency cross transaction for an advisory client shall comply with the following conditions; provided, that an investment advisor having its principal place of business outside this Commonwealth and registered or licensed, and in compliance with the applicable books and records requirements, in the state where its principal place of business is located, shall only be required to make, keep current, maintain and preserve such of the following required books, ledgers and records as are not in addition to those required under the laws of the state in which it maintains its principal place of business:

1. Obtain from the advisory client a written consent prospectively authorizing the investment advisor to effect agency cross transactions for such client.

2. Before obtaining such written consent from the client, disclose to the client in writing that, with respect to agency cross transactions, the investment advisor will act as broker-dealer for, receive commissions from and have a potentially conflicting division of loyalties and responsibilities regarding both parties to the transactions.

3. At or before the completion of each agency cross transaction, send the client a written confirmation. The written confirmation shall include (i) a statement of the nature of the transaction, (ii) the date the transaction took place (iii) an offer to furnish, upon request, the time when the transaction took place and (iv) the source and amount of any other remuneration the investment advisor received or will receive in connection with the transaction. In the case of a purchase, if the investment advisor was not participating in a distribution, or, in the case of a sale, if the investment advisor was not participating in a tender offer, the written confirmation may state whether the investment advisor has been receiving or will receive any other remuneration and that the investment advisor will furnish to the client the source and amount of such remuneration upon the client's written request.

4. At least annually, and with or as part of any written statement or summary of the account from the investment advisor, send each client a written disclosure statement identifying (i) the total number of agency cross transactions during the period since the date of the last such statement or summary and (ii) the total amount of all commissions or other remuneration the investment advisor received or will receive in connection with agency cross transactions during the period.

5. Each written disclosure and confirmation required by this section must include a conspicuous statement that the client may revoke the written consent required under subdivision B1 of this section at any time by providing written notice of revocation to the investment advisor.

6. No agency cross transaction may be effected in which the same investment advisor recommended the transaction to both any seller and any purchaser.

C. Nothing in this section shall be construed to relieve an investment advisor or investment advisor representative from acting in the best interests of the client, including fulfilling his duty with respect to the best price and execution for the particular transaction for the client nor shall it relieve any investment advisor or investment advisor representative of any other disclosure obligations imposed by the Act.