The Investment Advisers Act of 1940, codified at through , is a United States federal law that was created to monitor and regulate the activities of investment advisers (also spelled "advisors") as defined by the law. It is the primary source of regulation of investment advisers and is administered by the U.S. Securities and Exchange Commission. Overview The law provides in part: Contents Section 201 Findings Section 202(a) Definitions Section 202(b) Governments Excepted Section 203 Registration of Investment Advisers Section 203A State and Federal Responsibilities Section 204 Annual and Other Reports Section 204A Prevention of Misuse of Nonpublic Information Section 205 Investment Advisory Contracts Section 206 Prohibited Transactions by Investment Advisers Section 206A Exemptions Section 207 Material Misstatements Section 208 General Prohibitions Section 209 Enforcement of Title Section 210 Publicity Rules, Regulations and Orders (Section 211) Hearings (Section 212) Court Review of Orders (Section 213) Jurisdiction of Offenses and Suits (Section 214) Validity of Contracts (Section 215) Annual Reports of Commission (Section 216) Penalties (Section 217) Hiring and Leasing Authority of the Commission (Section 218) Separability of Provisions (Section 219) Short Title (Section 220) Effective Date (Section 221) State Regulation of Investment Advisers (Section 222) Summary The Investment Advisers Act (IAA) was passed in 1940 to monitor those who, for a fee, advise people, pension funds, and institutions on investment matters. Impetus for passage of the act began with the Public Utility Holding Company Act of 1935, which authorized the Securities and Exchange Commission (SEC) to study investment trusts. The thrust of the study, which led to the passage of the Investment Company Act of 1940 and the Investment Advisers Act, was to provide a closer look at investment trusts and investment companies. The study, however, found many instances of investment adviser abuse, such as unfounded "hot tips" and questionable performance fees. The IAA sought less to regulate investment advisers than to keep track of who was in the industry and their methods of operation. The IAA does not mandate qualifications for becoming an investment adviser but requires registration for those using the mails to conduct investment counseling business. The IAA mandated all persons and firms receiving compensation for serving as investment advisers to register with the SEC. The requirement has been revised on several occasions since then, most notably with the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. There are, however, several exceptions