§ 5411. Postregistration requirements
(a) Subject to 15 U.S.C. § 78o(h) or 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.
(b) Subject to 15 U.S.C. § 78o(h) or 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.
(c) Subject to 15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22:
(1) 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;
(2) broker-dealer records required to be maintained under subdivision (1) of this subsection
may be maintained in any form of data storage acceptable under 15 U.S.C. § 78q(a) if they are readily accessible to the Commissioner; and
(3) investment adviser records required to be maintained under subdivision (1) of this
subsection may be maintained in any form of data storage required by rule adopted
or order issued under this chapter.
(d) 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 Commissioner, within or without this State,
as the Commissioner 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 Commissioner may copy, and remove for audit or inspection
copies of, all records the Commissioner reasonably considers necessary or appropriate
to conduct the audit or inspection. The Commissioner may assess a reasonable charge
for conducting an audit or inspection under this subsection.
(e) Subject to 15 U.S.C. § 78o(h) or 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 to be established by rule or order. The Commissioner may
determine the requirements of the insurance, bond, or other satisfactory form of security.
Insurance or a bond or other satisfactory form of security may 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 subdivision 5509(j)(2) of this chapter.
(f) Subject to 15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22, an agent may not have custody of funds or securities of a customer except under
the supervision of a broker-dealer, and an investment adviser representative may 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.
(g) 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 record 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.
(h) A rule adopted or order issued under this chapter may require an individual registered
under section 5402 or 5404 of this chapter 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 5404. (Added 2005, No. 11, § 1, eff. July 1, 2006.)