502.411 - POSTREGISTRATION REQUIREMENTS.

        502.411  POSTREGISTRATION REQUIREMENTS.         1.  Financial requirements.  Subject to section 15(h) of the      Securities Exchange Act of 1934, 15 U.S.C. § 78o(h), or section 222      of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-22, a rule      adopted or order issued under this chapter may establish minimum      financial requirements for broker-dealers registered or required to      be registered under this chapter and investment advisers registered      or required to be registered under this chapter.         2.  Financial reports.  Subject to section 15(h) of the      Securities Exchange Act of 1934, 15 U.S.C. § 78o(h), or section      222(b) of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-22, a      broker-dealer registered or required to be registered under this      chapter and an investment adviser registered or required to be      registered under this chapter shall file such financial reports as      are required by a rule adopted or order issued under this chapter.      If the information contained in a record filed under this subsection      is or becomes inaccurate or incomplete in a material respect, the      registrant shall promptly file a correcting amendment.  The      administrator may, by rule, assess a reasonable charge for the late      filing of a financial report under this subsection.         3.  Recordkeeping.  Subject to section 15(h) of the Securities      Exchange Act of 1934, 15 U.S.C. § 78o(h), or section 222 of the      Investment Advisers Act of 1940, 15 U.S.C. § 80b-22, all of the      following apply:         a.  A broker-dealer registered or required to be registered      under this chapter and an investment adviser registered or required      to be registered under this chapter shall make and maintain the      accounts, correspondence, memoranda, papers, books, and other records      required by rule adopted or order issued under this chapter.         b.  Broker-dealer records required to be maintained under      paragraph "a" may be maintained in any form of data storage      acceptable under section 17(a) of the Securities Exchange Act of      1934, 15 U.S.C. § 78q(a), if they are readily accessible to the      administrator.         c.  Investment adviser records required to be maintained under      paragraph "a" may be maintained in any form of data storage      required by rule adopted or order issued under this chapter.         4.  Audits or inspections.  The records of a broker-dealer      registered or required to be registered under this chapter and of an      investment adviser registered or required to be registered under this      chapter are subject to such reasonable periodic, special, or other      audits or inspections by a representative of the administrator,      within or without this state, as the administrator considers      necessary or appropriate in the public interest and for the      protection of investors.  An audit or inspection may be made at any      time and without prior notice.  The administrator may copy, and      remove for audit or inspection copies of, all records the      administrator reasonably considers necessary or appropriate to      conduct the audit or inspection.  The administrator may assess a      reasonable charge for conducting an audit or inspection under this      subsection.         5.  Custody and discretionary authority bond or insurance.      Subject to section 15(h) of the Securities Exchange Act of 1934, 15      U.S.C. § 78o(h), or section 222 of the Investment Advisers Act of      1940, 15 U.S.C. § 80b-22, a rule adopted or order issued under this      chapter may require a broker-dealer or investment adviser that has      custody of or discretionary authority over funds or securities of a      customer or client to obtain insurance or post a bond or other      satisfactory form of security in an amount the administrator shall      prescribe.  The administrator may determine the requirements of the      insurance, bond, or other satisfactory form of security.  Insurance      or a bond or other satisfactory form of security shall not be      required of a broker-dealer registered under this chapter whose net      capital exceeds, or of an investment adviser registered under this      chapter whose minimum financial requirements exceed, the amounts      required by rule or order under this chapter.  The insurance, bond,      or other satisfactory form of security must permit an action by a      person to enforce any liability on the insurance, bond, or other      satisfactory form of security if instituted within the time      limitations in section 502.509, subsection 10, paragraph "b".         6.  Requirements for custody.  Subject to section 15(h) of the      Securities Exchange Act of 1934, 15 U.S.C. § 78o(h), or section 222      of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-22, an agent      shall not have custody of funds or securities of a customer except      under the supervision of a broker-dealer and an investment adviser      representative shall not have custody of funds or securities of a      client except under the supervision of an investment adviser or a      federal covered investment adviser.  A rule adopted or order issued      under this chapter may prohibit, limit, or impose conditions on a      broker-dealer regarding custody of funds or securities of a customer      and on an investment adviser regarding custody of securities or funds      of a client.         7.  Investment adviser brochure rule.  With respect to an      investment adviser registered or required to be registered under this      chapter, a rule adopted or order issued under this chapter may      require that information or other records be furnished or      disseminated to clients or prospective clients in this state as      necessary or appropriate in the public interest and for the      protection of investors and advisory clients.         8.  Continuing education.  A rule adopted or order issued      under this chapter may require an individual registered under section      502.402 or 502.404 to participate in a continuing education program      approved by the securities and exchange commission and administered      by a self-regulatory organization or, in the absence of such a      program, a rule adopted or order issued under this chapter may      require continuing education for an individual registered under      section 502.404.  
         Section History: Recent Form
         2004 Acts, ch 1161, §36, 68         Referred to in § 502.412, 502.509, 502.607