15 CSR 30-51.140 - Records Required of and To Be Preserved by Investment Advisers
(1) Every
investment adviser registered or required to be registered under the Missouri
Securities Act of 2003 shall make and keep true, accurate and current the
following books and records relating to its investment advisory business:
(A) A journal or journals, including cash
receipts and disbursements, records, and any other records of original entry
forming the basis of entries in any ledger;
(B) General and auxiliary ledgers (or other
comparable records) reflecting asset, liability, reserve, capital, income and
expense accounts;
(C) A memorandum
of each order given by the investment adviser for the purchase or sale of any
security, of any instruction received by the investment adviser concerning the
purchase, sale, receipt or delivery of a particular security, and of any
modification or cancellation of any such order or instruction. Such memoranda
shall show the terms and conditions of the order, instruction, modification or
cancellation; shall identify the person connected with the investment adviser
who recommended the transaction to the client and the person who placed such
order; and shall show the account for which entered, the date of entry, and the
bank, broker or dealer by or through whom executed where appropriate. Orders
entered pursuant to the exercise of discretionary power shall be so
designated;
(D) All checkbooks,
bank statements, cancelled checks and cash reconciliations of the investment
adviser;
(E) All bills or
statements (or copies thereof), paid or unpaid, relating to the business of the
investment adviser as such;
(F) All
trial balances, financial statements, and internal audit working papers
relating to the business of such investment adviser;
(G) Originals of all written communications
received and copies of all written communications sent by such investment
adviser relating to any recommendation made or proposed to be made and any
advice given or proposed to be given, any receipt, disbursement or delivery of
funds or securities, or the placing or execution of any order to purchase or
sell any security. Provided, however, the investment adviser shall not be
required to keep any unsolicited market letters and other similar
communications of general public distribution not prepared by or for the
investment adviser, and that if the investment adviser sends any notice,
circular or other advertisement offering any report, analysis, publication or
other investment advisory service to more than ten (10) persons, the investment
adviser shall not be required to keep a record of the names and addresses of
the persons to whom it was sent; except that if such notice, circular or
advertisement is distributed to persons named on any list, the investment
adviser shall retain with the copy of such notice, circular or advertisement a
memorandum describing the list and the source thereof;
(H) A list or other record of all accounts in
which the investment adviser is vested with any discretionary power with
respect to the funds, securities or transactions of any client;
(I) All powers of attorney and other
evidences of the granting of any discretionary authority by any client to the
investment adviser, or copies thereof;
(J) All written agreements (or copies
thereof) entered into by the investment adviser with any client or otherwise
relating to the business of such investment adviser as such;
(K) A copy of each notice, circular,
advertisement, newspaper article, investment letter, bulletin or other
communication that the investment adviser circulates or distributes, directly
or indirectly, to ten (10) or more persons (other than persons connected with
such investment adviser), and if such notice, circular, advertisement,
newspaper article, investment letter, bulletin or other communication
recommends the purchase or sale of a specific security and does not state the
reasons for such recommendation, a memorandum of the investment adviser
indicating the reasons therefor;
(L) A copy of each written disclosure
statement and each amendment or revision thereof, given or sent to any client
or prospective client of such investment adviser, and a record of the dates
that each written disclosure statement, and each amendment or revision thereof,
was given, or offered to be given, to any client or prospective client who
subsequently becomes a client;
(M)
All written agreements or acknowledgments of receipt obtained from clients and
copies of the disclosure documents delivered to clients by these solicitors
pursuant to 15 CSR 30-51.145; and
(N) All accounts, books, internal working
papers, and any other records or documents that are necessary to form the basis
for or demonstrate the calculation of the performance or rate of return of any
or all managed accounts or securities recommendations in any notice, circular,
advertisement, newspaper article, investment letter, bulletin or other
communication that the investment adviser circulates or distributes, directly
or indirectly, to ten (10) or more persons (other than persons connected with
such investment adviser); provided, however, that, with respect to the
performance of managed accounts, the retention of all account statements, if
they reflect all debits, credits, and other transactions in a client's account
for the period of the statement, and all worksheets necessary to demonstrate
the calculation of the performance or rate of return of all managed accounts
shall be deemed to satisfy the requirements of this subsection.
(2) If an investment adviser
subject to section (1) of this rule has custody or possession of securities or
funds of any client, the records required to be made and kept under section (1)
of this rule shall include:
(A) A journal or
other record showing all purchases, sales, receipts and deliveries of
securities (including certificate numbers) for such accounts and all other
debits and credits to such accounts;
(B) A separate ledger account for each such
client showing all purchases, sales, receipts and deliveries of securities, the
date and price of each purchase and sale, and all debits and credits;
(C) Copies of confirmations of all
transactions effected by or for the account of any such client; and
(D) A record for each security in which any
such client has a position, which record shall show the name of each such
client having any interest in such security, the amount or interest of each
such client, and the location of each such security.
(3) Every investment adviser subject to
section (1) of this rule who renders any investment supervisory or management
service to any client shall, with respect to the portfolio being supervised or
managed and to the extent that the information is reasonably available to or
obtainable by the investment adviser, make and keep true, accurate and current:
(A) Records showing separately for each such
client the securities purchased and sold, and the date, amount and price of
each such purchase and sale; and
(B) For each security in which any such
client has a current position, information from which the investment adviser
can promptly furnish the name of each such client, and the current amount or
interest of such client.
(4) Any books or records required by this
rule may be maintained by the investment adviser in such manner that the
identity of any client to whom such investment adviser renders investment
supervisory services is indicated by numerical or alphabetical code or some
similar designation.
(5) All books
and records required to be made under the provisions of sections (1) to
subsection (3)(A), inclusive, of this rule (except for books and records
required to be made under the provisions of subsections (1)(K) and (1)(N) of
this rule), shall be maintained and preserved in an easily accessible place for
a period of not less than five (5) years from the end of the fiscal year during
which the last entry was made on such record, the first two (2) years in an
appropriate office of the investment adviser.
(A) Partnership articles and any amendments
thereto, articles of incorporation, charters, minute books, and stock
certificate books of the investment adviser and of any predecessor, shall be
maintained in the principal office of the investment adviser and preserved
until at least three (3) years after termination of the enterprise.
(B) Books and records required to be made
under the provisions of subsections (1)(K) and (1)(N) of this rule shall be
maintained and preserved in an easily accessible place for a period of not less
than five (5) years, the first two (2) years in an appropriate office of the
investment adviser, from the end of the fiscal year during which the investment
adviser last published or otherwise disseminated, directly or indirectly, the
notice, circular, advertisement, newspaper article, investment letter, bulletin
or other communication.
(6) An investment adviser subject to section
(1) of this rule, before ceasing to conduct or discontinuing business as an
investment adviser shall arrange for and be responsible for the preservation of
the books and records required to be maintained and preserved under this rule
for the remainder of the period specified in this rule, and shall notify the
commissioner in writing, of the exact address where such books and records will
be maintained during such period.
(7) Micrographic and Electronic Storage
Permitted.
(A) General. The records required
to be maintained and preserved pursuant to this part may be maintained and
preserved for the required time by an investment adviser on:
1. Micrographic media, including microfilm,
microfiche, or any similar medium; or
2. Electronic storage media, including any
digital storage medium or system that meets the terms of this rule.
(B) General Requirements. The
investment adviser must:
1. Arrange and index
the records in a way that permits easy location, access, and retrieval of any
particular record;
2. Provide
promptly any of the following that the commissioner (by his examiners or other
representatives) may request:
A. A legible,
true, and complete copy of the record in the medium and format in which it is
stored;
B. A legible, true, and
complete printout of the record; and
C. Means to access, view, and print the
records; and
D. Separately store,
for the time required for preservation of the original record, a duplicate copy
of the record on any medium allowed by this rule.
(C) Special requirements for
electronic storage media. In the case of records on electronic storage media,
the investment adviser must establish and maintain procedures:
1. To maintain and preserve the records, so
as to reasonably safeguard them from loss, alteration, or
destruction;
2. To limit access to
the records to properly authorized personnel and the commissioner (including
its examiners and other representatives); and
3. To reasonably ensure that any reproduction
of a non-electronic original record on electronic storage media is complete,
true, and legible when retrieved.
(8) Any book or other record made, kept,
maintained and preserved in compliance with section 240.17a-3 and 240.17a-4
under the Securities Exchange Act of 1934, which is substantially the same as
the book or other record required to be made, kept, maintained and preserved
under this rule, shall be deemed to be made, kept, maintained and preserved in
compliance with this rule.
(A) A record made
and kept pursuant to any provision of section (1) of this rule, which contains
all the information required under any other provision of section (1) of this
rule, need not be maintained in duplicate in order to meet the requirements of
the other provision of section (1) of this rule.
(9) As used in this rule the term
"discretionary power" shall not include discretion as to the price at which or
the time when a transaction is or is to be effected, if, before the order is
given by the investment adviser, the client has directed or approved the
purchase or sale of a definite amount of the particular security.
Notes
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