710 IAC 4-7-3 - Books and records
Authority: IC 23-19-6-5
Affected: IC 23-19-4-1
Sec. 3.
(a) A
broker-dealer that:
(1) is subject to the
record keeping requirements of Section 17(a) of the Securities Exchange Act of
1934 (15 U.S.C.
78q(a)) ; and
(2) maintains its books and records in
accordance with those rules;
is not subject to this section.
(b) Each registered broker-dealer shall make
and keep current the following books and records:
(1) Blotters (or other records of original
entry) must:
(A) contain an itemized daily
record of all:
(i) purchases and sales of
securities;
(ii) receipts and
deliveries of securities (including certificate numbers);
(iii) receipts and disbursements of cash;
and
(iv) other debits and credits;
and
(B) show the:
(i) account for which each transaction was
effected;
(ii) name and amount of
securities;
(iii) unit and
aggregate purchase or sale price (if any);
(iv) trade date; and
(v) name or other designation of the person
from whom purchased or received or to whom sold or delivered.
(2) Ledgers (or other
records) reflecting all:
(A) assets;
(B) liabilities;
(C) income;
(D) expense; and
(E) capital accounts.
(3) Ledger accounts (or other records)
itemizing separately as to each cash and margin account of every customer and
of the broker-dealer and partners or officers all:
(A) purchases;
(B) sales receipts;
(C) deliveries of securities and commodities
for the account;
(D) debits;
and
(E) credits to the
account.
(4) Ledgers (or
other records) reflecting the following:
(A)
Securities in transfer.
(B)
Dividends and interest received.
(C) Securities borrowed and securities
loaned.
(D) Monies borrowed and
monies loaned (together with a record of the collateral therefor and any
substitutions in the collateral).
(E) Securities failed to receive and failed
to deliver.
(5) A
securities record or ledger reflecting separately for each security as of the
clearance dates all "long" or "short" positions (including securities in
safekeeping) carried by the broker-dealer for his or her account or for the
account of the broker-dealer's:
(A)
customers;
(B) partners;
or
(C) officers;
and showing the location of all securities long, and offsetting position to all securities short and in all cases the name or designation of the account in which each position is carried.
(6) A memorandum of each brokerage
order and of any other instruction given or received for the purchase or sale
of securities, whether executed or unexecuted. The memorandum shall show the
following:
(A) Terms and conditions of the
order or instructions and of any modification or cancellation.
(B) The account for which entered.
(C) The time of entry.
(D) The price at which executed.
(E) To the extent feasible, the time of
execution or cancellation.
Orders entered pursuant to the exercise of discretionary power by the broker-dealer or any employee thereof shall be so designated. The term "instruction" shall be deemed to include instructions between partners or officers and employees of a broker-dealer. The term "time of entry" shall be deemed to mean the time when the broker-dealer transmits the order or instruction for execution or, if it is not so transmitted, the time when it is received.
(7) A
memorandum of each purchase and sale of securities for the account of the
broker-dealer showing the price and, to the extent feasible, the time of
execution.
(8) Copies of
confirmations of all purchases and sales of securities and copies of notices of
all other debits and credits for securities, cash, and other items for the
account of customers and partners or officers of the broker-dealer.
(9) A record in respect of each cash and
margin account with the broker-dealer containing the name and address of the
beneficial owner of the account and, in the case of a margin account, the
signature of the owner, provided that, in the case of a joint account or an
account of a corporation, the records are required only in respect of the
person or persons authorized to transact business for the account.
(10) A record of all:
(A) puts;
(B) calls;
(C) spreads;
(D) straddles; and
(E) other options in which the broker-dealer
has any direct or indirect interest or that the broker-dealer has granted or
guaranteed;
containing at least an identification of the security and the number of units involved.
(11) A record of the proof of money balances
of all ledger accounts in the form of trial balances and a record of the
computation of aggregate indebtedness, and net liquid capital as of the trial
balance date. However, the trial balances and computations shall be prepared
currently at least once a month.
(12) A questionnaire or application for
employment executed by each associated person of the broker-dealer, and this
questionnaire or application shall be approved in writing by an authorized
representative of the broker-dealer and shall contain at least the following
information with respect to the person:
(A)
The:
(i) name;
(ii) address;
(iii) Social Security number; and
(iv) starting date of employment or other
association with the member or broker-dealer.
(B) Date of birth.
(C) The educational institutions attended and
whether or not he or she graduated.
(D) A complete, consecutive statement of all
business connections for at least the preceding ten (10) years, including
reason for leaving each prior employment and whether the employment was part
time or full time.
(E) A record of
any denial of membership or registration and of any disciplinary action taken
or sanction imposed by any federal or state agency or by any national
securities exchange or national securities association, including any findings
of any disciplinary action or violation of any law.
(F) A record of any:
(i) denial;
(ii) suspension;
(iii) expulsion; or
(iv) revocation;
of membership or registration of any broker-dealer with which the applicant was associated in any capacity when the action was taken.
(G) A record of any
permanent or temporary injunction entered against the applicant or any
broker-dealer with which the applicant was associated in any capacity at the
time the injunction was entered.
(H) A record of any:
(i) arrests;
(ii) indictments; or
(iii) convictions;
for any felony or any misdemeanor, except minor traffic offenses, of the applicant.
(I) A record of any other name or names by
which the applicant has been known or that the applicant has used.
(13) The records specified in
subdivisions (1) through (12), inclusive, shall not be required with respect to
any cash transaction of one hundred dollars ($100) or less involving only
subscription rights or warrants that by their terms expire within ninety (90)
days after the issuance thereof.
(c) Every broker-dealer subject to subsection
(b) shall preserve for a period of six (6) years, the first two (2) years in an
easily accessible place, all records required to be made under subsection
(b)(1), (b)(2), (b)(3), and (b)(5).
(d) Every broker-dealer subject to subsection
(b) shall preserve for a period of three (3) years, the following:
(1) All records required to be made under
subsection (b)(4) and (b)(6) through (b)(9).
(2) All checkbooks, bank statements, canceled
checks, and cash reconciliations.
(3) All bills receivable or payable (or
copies thereof), paid or unpaid, relating to the business of the
broker-dealer.
(4) Originals of all
communications received and copies of all communications sent by the
broker-dealer (including interoffice memoranda and communications) relating to
his or her business.
(5) All:
(A) trial balances;
(B) computations of aggregate
indebtedness;
(C) net liquid
capital (and working papers in connection therewith);
(D) financial statements;
(E) branch office reconciliations;
and
(F) internal audit working
papers;
relating to the business of the broker-dealer.
(6) All guarantees of
accounts and all powers of attorney and other evidence of the granting of any
discretionary authority given in respect of any account, and copies of
resolutions empowering an agent to act on behalf of a corporation.
(7) All written agreements (or copies
thereof) entered into by the broker-dealer relating to his or her business,
including agreements with respect to any account.
(e) Every broker-dealer subject to subsection
(b) shall preserve for a period of not less than six (6) years after the
closing of any account cards or records that relate to the terms and conditions
with respect to the opening and maintenance of the account.
(f) Every broker-dealer subject to subsection
(b) shall preserve during the life of the enterprise and of any successor
enterprise all partnership articles or, in the case of a corporation, all:
(1) articles of incorporation or
charter;
(2) minute books;
and
(3) stock certificate
books.
(g) Every
broker-dealer subject to subsection (b) shall maintain and preserve in an
easily accessible place all records required under subsection (b)(12) until at
least three (3) years after the associated person has terminated his or her
employment and any other connection with the broker-dealer.
(h) If a person who has been subject to
subsection (b) ceases to be registered under IC
23-19-4, the person shall for the
remainder of the periods of time specified in this section continue to preserve
the records that he or she preserved under this section.
Notes
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