Compilation of Rules and Regulations of the State of Georgia
Rule 590-4-4-.18 - Financial Reporting Requirements for Investment Advisers

Current through Rules and Regulations filed through September 25, 2023

(1) Every investment adviser registered or required to be registered pursuant to Section 10-5-32 of the Act, who has custody of client funds or securities or requires payment of its advisory fees six (6) months or more in advance and in excess of $500 per client shall file with the Commissioner an audited balance sheet as of the end of the investment adviser's most recent fiscal year. Each balance sheet filed pursuant to this Rule must be:

(a) Prepared in conformity with generally accepted accounting principles;

(b) Audited by an independent certified public accountant in accordance with generally accepted auditing standards; and

(c) Accompanied by an opinion of the accountant as to the report of financial position, and by a note stating the principles used to prepare it, the basis of included securities, and any other explanations required for clarity.

(2) Any investment adviser may be required by the Commissioner to file a financial statement showing the investment adviser's financial condition as of the most recent practicable date. Except as provided in subsection (1) of this rule, such financial statements need not be audited.

(3) The financial statements required by this Rule shall be filed with the Commissioner within ninety (90) days following the end of the investment adviser's fiscal year.

(4) Every investment adviser that has its principal place of business in a state other than this State shall file only such reports as required by the state in which the investment adviser maintains its principal place of business, provided the investment adviser is registered or licensed in such state and is in compliance with such state's financial reporting requirements.

(5) For purposes of this rule,"custody" shall have the same meaning as in Rule 590-4-4-.20.

(6) An investment adviser is not required to comply with subsection (1) of this Rule if all of the following are met:

(a) The investment adviser has custody of funds solely as a consequence of its authority to make withdrawals from client accounts to pay its advisory fee;

(b) The investment adviser has written authorization from the client to deduct advisory fees from the account held with the qualified custodian; and

(c) The investment adviser notifies the Commissioner in writing, via Form ADV, that it employs the safekeeping procedures of Rule 590-4-4-.20, excluding subsection (1)(f) thereof.

(7) Any filing made pursuant to subsections (1) or (2) of this Rule may be made electronically as provided for by the Commissioner.

O.C.G.A. Sec. 10-5-40.

Original Rule entitled "Financial Reporting Requirements for Investment Advisers" adopted. F. Nov. 18, 2011; eff. Dec. 8, 2011.

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