Wash. Admin. Code § 460-24A-109 - Exceptions from custody requirements

Current through Register Vol. 21-24, December 15, 2021

Exceptions from the custody requirements for investment advisers that are registered or required to be registered under RCW 21.20.040 are available in the following circumstances:

(1)
(a) You are not required to engage a qualified custodian to hold certain privately offered securities. You are not required to comply with WAC 460-24A-105(2) with respect to securities that are:
(i) Acquired from the issuer in a transaction or chain of transactions not involving any public offering;
(ii) Uncertificated, and ownership thereof is recorded only on books of the issuer or its transfer agent in the name of the client; and
(iii) Transferable only with prior consent of the issuer or holders of the outstanding securities of the issuer.
(b) Notwithstanding (a) of this subsection, the provisions of this subsection (1) are available with respect to securities held for the account of a limited partnership (or limited liability company, or other type of pooled investment vehicle) only if you comply with the requirements in WAC 460-24A-107(1)(b).
(2) You are not required to comply with the custody requirements with respect to the account of a registered investment company. You are not required to comply with WAC 460-24A-105 through 460-24A-108 with respect to the account of an investment company registered under the Investment Company Act of 1940, 15 U.S.C. 80a-1 to 80a-64.
(3) You are not required to comply with the custody requirements with respect to a trust for the benefit of your relative. You are not required to comply with the requirements of WAC 460-24A-105 through 460-24A-108 or the net worth and bonding requirements for an investment adviser that has custody set forth in WAC 460-24A-170 if you have custody solely because you or one of your representatives, employees, directors, or owners is a trustee for a beneficial trust, if all of the following conditions are met for each trust:
(a) The beneficial owner of the trust is your parent, a grandparent, a spouse or domestic partner, a sibling, a child, a grandchild, an aunt, an uncle, a niece, a nephew, or a first cousin. These relationships include "step" relationships.
(b) For each account under (a) of this subsection, you comply with the following:
(i) You provide a written statement to each beneficial owner of the account setting forth a description of the requirements of WAC 460-24A-105 through 460-24A-108 and WAC 460-24A-170 and the reasons why you will not be complying with those requirements;
(ii) You obtain from each beneficial owner a signed and dated statement acknowledging the receipt of the written statement required under (b)(i) of this subsection; and
(iii) You maintain a copy of both documents described in (b)(i) and (ii) of this subsection until the account is closed or you are no longer trustee.

Notes

Wash. Admin. Code § 460-24A-109
Amended by WSR 14-13-068, Filed 6/12/2014, effective 7/13/2014 Amended by WSR 19-03-133, Filed 1/18/2019, effective 2/18/2019

Statutory Authority: RCW 21.20.450, 21.20.900, 21.20.100, 21.20.050 - [21.20].060. 08-18-033, § 460-24A-109, filed 8/27/08, effective 9/27/08.

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