Investor Representative

You want compliance for your principal agency transactions.

Then you need investor representatives you can rely on for timely consent.

Section 206(3) of the Investment Advisers Act of 1940 restricts registered investment advisers (“advisers”) from entering into certain principal and agency transactions on behalf of clients without disclosure to and consent from such clients. Many advisers are faced with the challenge of how to comply when they have transactions that impact a large number of investors. 

Compliance with Section 206(3) of the Investment Advisers Act of 1940 requires advisers to disclose the principal or agency transaction in writing to its applicable clients. In situations where an adviser may be conducting principal or agency transactions that involve a sponsored fund, this level of communication can be overwhelming and time consuming as there may be hundreds of underlying investors that need to receive written notification and then need to consent to the principal or agency transaction.

Investor representation valued by advisers and investors

Arthur Bell helps with shareholder representation by acting as the investor representative on behalf of the adviser’s clients. We are responsible for receiving written notification of the principal or agency transaction and then providing consent to the transaction. Advisers appreciate Arthur Bell’s investor representation services because we eliminate the need to communicate with each investor for approval on every principal or agency transaction that requires compliance with Section 206(3) of the Investment Advisers Act of 1940. We also assist advisers with educating their traders and internal staff about what is needed to ensure compliance with the regulation which adds comfort that the adviser will be in compliance if a principal or agency transaction ever comes under scrutiny.

The adviser’s clients value Arthur Bell’s investor representation services because of our quality assurance. Our Investor Representative Committee is diligent in ensuring that we identify conflicts of interest and design our procedures to ensure that those conflicts are mitigated. 

Reliable investor representation services built on experience

We have been appointed as shareholder representative for dozens of advisers. Our firm has consented to hundreds of transactions involving private equity investments, term loans, bonds, equities, futures, investments in alternative investment funds, total return swaps, credit default swaps, contracts for difference, collateralized debt obligations, and many other types of instruments.

We work with advisers to inform their clients about the purpose and value of having Arthur Bell serve as their investor representative. Once we gain shareholder representation approval of the clients, we are able to:

  • Provide timely consent to principal or agency transactions after we first:
    • Understand the business purpose of the transaction
    • Determine if there is any compensation paid to the adviser as a result of the transaction
    • Identify all conflicts of interest and develop procedures to mitigate those conflicts of interest
    • Ensure that there is appropriate third party evidence supporting that the transaction is occurring at a price that is indicative of fair value
    • Prepare thorough documentation that meets regulatory guidelines
    • Perform any additional procedures deemed necessary
  • Consult on compliance with regulations
  • Share best practices in the industry
  • Possibly eliminate commissions charged by executing brokers


We welcome you to contact us for more information on Arthur Bell and how we can help with your investor representative needs. You can reach us at (410) 771-0001 or via email at

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedIn