(1) All broker-dealers and agents who are
registered or required to be registered with the SEC or are members of FINRA or
any national securities exchange registered with the SEC shall make, keep and
preserve such records as the SEC, FINRA, and national securities exchanges
registered with the SEC require be made, kept, and preserved. These records
shall be subject to inspection by the Commissioner. The records of a
broker-dealer and agent registered or required to be registered under the Act
are subject to such reasonable periodic or special inspections by a
representative of the Commissioner as the Commissioner considers necessary or
appropriate in the public interest and for the protection of investors. An
inspection may be made at any time and without prior notice. The Commissioner
may copy and remove any record the Commissioner reasonably considers necessary
or appropriate to conduct the inspection. The fee for a routine examination of
a broker-dealer shall be thirty-five (35) dollars per working hour with the
total fee not to exceed $1,000.
(2)
Broker-dealers that are not registered with the SEC or are not members of FINRA
or of any national securities exchange registered with the SEC shall make and
keep the following records:
(a) Blotters (or
other records of original entry) containing an itemized daily record of all
purchases and sales of securities, all receipts and deliveries of securities
(including certificate numbers), all receipts and disbursements of cash and all
other debits and credits. These records shall show the account for which each
such transaction was effected, the names and amount of securities, the unit and
aggregate purchase or sale price (if any), the trade date and the names or
other designation of the person(s) from whom, purchased or received or to whom
sold or delivered.
(b) Ledgers (or
other records) reflecting all assets and liabilities, income and expenses and
capital accounts.
(c) Ledger
accounts (or other records) itemizing separately, as to each cash and margin
account of every customer and of such broker-dealer and partners thereof, all
purchases, sales, receipts, and deliveries of securities for such account and
all other debits and credits to such account.
(d) Ledgers (or other records) reflecting the
following:
1. Securities in
transfer;
2. Dividends and interest
received;
3. Securities borrowed
and securities loaned;
4. Money
borrowed and money loaned (together with a record of the collateral therefore
and any substitutions in such collateral); and
5. Securities failed to receive and failed to
deliver.
(e) 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 such broker-dealer for its account or for the account
of its customers or partners showing the location of all securities "long" and
the offsetting position to all securities "short" and, in all cases, the name
or designation of the account in which each position is carried.
(f) 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. This memorandum shall show the terms
and conditions of the order or instruction and of any modification or
cancellation thereof, the account for which the order or instruction was
entered, the time of entry, the price at which the order or instruction was
executed and, to the extent feasible, the time of execution or cancellation and
whether the order was solicited or unsolicited. Orders entered pursuant to the
exercise of discretionary power by such broker-dealer, or any associated person
thereof, shall be so designated. The term "instruction" shall be deemed to
include instructions between partners and associated persons of a
broker-dealer. The term "time of entry" shall be deemed to mean the time when
such broker-dealer transmits the order or instruction for execution, or, if it
is not so transmitted, the time when it was received.
(g) A memorandum of each purchase or sale of
securities for the account of such broker-dealer showing the price and, to the
extent feasible, the time of execution; and, in addition, where such purchase
or sale is with a customer other than a broker or dealer, a memorandum of each
order received, showing the time of receipt, the terms and conditions of the
order, and the account in which it was entered.
(h) 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 accounts of customers and partners
of such broker-dealer.
(i) A record
in respect of each cash and margin account with such broker-dealer containing
the name and address of the beneficial owner of such account and, in the case
of a margin account, the signature of such owner; provided, however, that in
the case of a joint account or an account of a corporation, limited liability
company or partnership, such records are required only in respect of the person
or persons authorized to transact business for such account.
(j) A record of all puts, calls, spreads,
straddles and other options that such broker-dealer has granted or guaranteed
containing, at least, an identification of the security and the number of units
involved.
(k) A record of the proof
of money balances of all ledger accounts in the form of trial balances. These
trial balances shall be prepared currently at least once a month.
(l) An application for employment executed by
each "associated person" (as hereinafter defined) of such broker-dealer that is
approved in writing by an authorized representative of such broker-dealer and
contains at least the following information with respect to such associated
person:
1. Name, address, social security
number and the starting date of employment or other association with the
broker-dealer;
2. Date of
birth;
3. The educational
institutions attended and whether the associated person graduated
therefrom;
4. A complete,
consecutively ordered statement of all business connections for at least the
preceding seven (7) years, including reason(s) for leaving each prior
employment and whether the employment was part-time or full-time;
5. A record of any denial of membership or
registration and of any disciplinary action taken or sanction imposed upon him
or her by any Federal or State agency or any national securities exchange or
national securities association, including any finding that he or she was a
cause of any disciplinary action or had violated any law;
6. A record of any denial, suspension,
expulsion or revocation of membership in any national securities association,
securities exchange or registration with any state, federal or governmental
agency with which he or she was associated in any capacity when such action was
taken;
7. A record of any permanent
or temporary injunction entered against him or her or any member of a national
securities association or stock exchange or broker or dealer with which he or
she was associated in any capacity at the time such injunction was
entered;
8. A record of any
arrests, indictments or convictions for any felony or any misdemeanor, except
minor traffic offenses, of which he or she has been the subject;
9. A record of any other name or names by
which he or she has been known or has used; and
10. A record of all licenses, registrations
and memberships related to securities that he or she holds.
11. For purposes of Subsection (2)(l) of this
Rule, the term "associated person" shall mean a partner, officer, director,
agent, trader, manager, any employee or any independent contractor handling
funds or securities or soliciting transactions or accounts for such
broker-dealer.
(3) Broker-dealers not registered with the
SEC or not members of FINRA or of any national securities exchange registered
with the SEC shall preserve for a period of not less than five (5) years, the
first two (2) years in an easily accessible place, the records required to be
maintained by Sections (1) or (2) above and the following:
(a) All checkbooks, bank statements,
cancelled checks and cash reconciliations relating to the business of the
broker-dealer;
(b) All invoices (or
copies thereof) received by the broker-dealer from any other person relating to
the business of the broker-dealer, whether the broker-dealer paid the invoice
or the invoice is still payable, and, where the broker-dealer has paid the
invoice, all records of the payment made;
(c) All invoices (or copies thereof) sent by
the broker-dealer to any other person relating to the business of the
broker-dealer, whether the broker-dealer has received any payment from the
other person or any part of the invoice is still receivable, and, where the
broker-dealer has received a payment, either in full or in part, on the
invoice, all records of the payment received;
(d) Originals (maintained in paper or
electronic media storage) of all communications received and copies of all
written and electronic communications sent by such broker-dealer (including
interoffice memoranda and communications) relating to the business of the
broker-dealer;
(e) All trial
balances, financial statements, branch office reconciliations and internal
audit working papers, relating to the business of the broker-dealer;
(f) All guarantees of accounts and all powers
of attorney and other evidence of the granting of any discretionary authority
given in respect of any accounts, and copies of resolutions empowering an agent
to act on behalf of a corporation, limited liability company, partnership or
other third parties; and
(g) All
written agreements (or copies thereof) entered into by such broker-dealer
relating to its business, including agreements with respect to any
account.
(4)
Broker-dealers not registered with the SEC or not members of FINRA or of any
national securities exchange registered with the SEC that buy and sell
securities or hold securities for the account of customers shall preserve for a
period of not less than five (5) years after the closing of any customer's
account, for the first (2) two years in an easily accessible place, all account
cards, records or other documents that relate to the opening and maintenance of
any customer's account, including all records and documents relating to the
terms and conditions of such account (in paper or electronic media
storage).
(5) Broker-dealers not
registered with the SEC or not members of FINRA or of any national securities
exchange registered with the SEC that buy and sell securities or hold
securities for the account of customers shall maintain and preserve all records
with respect to "associated persons" required by Subsection (2)(l) above and
all similar records required to be kept by other agencies for a period of at
least five (5) years after the employment of the "associated person" has
terminated and he or she has no other connection with the
broker-dealer.
(6) Broker-dealers
not registered with the SEC or members of FINRA or of any national securities
exchange registered with the SEC that do not hold securities for the account of
customers and whose securities transactions are limited to selling securities
shall make and maintain the following records:
(a) With respect to every sale of securities
made by such broker-dealers, the following records shall be made and maintained
for five (5) years, for the first two (2) years in an easily accessible place:
1. A description of the types and amounts of
securities sold;
2. The date of the
sale;
3. The sales price and how
such price was determined;
4. The
commission earned and received for such sale by the broker-dealer and any
agent;
5. The name and address of:
(i) The person to whom the security(ies) was
(were) sold;
(ii) The agent who
made the sale; and
(iii) The issuer
or other person on whose behalf the sale was made;
(b) Originals of all
communications received and copies of all communications sent by such
broker-dealer (including interoffice memoranda and communications) relating to
the sale of securities; and
(c) For
each agent employed, a copy of the agent's application to the Commissioner for
registration as an agent and all orders, notices or correspondence received by
the broker-dealer with respect to such agent's registration.
(7) Every broker-dealer shall
preserve, during the life of the enterprise and of any successor enterprise,
all partnership articles or, in the case of a corporation or limited liability
company, all articles of incorporation or charter, minute books and stock
certificate books or similar documents.
(8) Agents who are not subject to the record
keeping requirements of the SEC, FINRA or any national securities exchange
registered with the SEC shall make and maintain for five (5) years, for the
first (2) two years in an easily accessible place, a record of all commissions,
overrides, draws, salary, expenses and other compensation or remuneration
received in connection with his or her securities sales efforts and the
following records with respect to every sale of securities in which such agent
participates in any way:
(a) A description of
the type and amount of securities sold;
(b) The date of the sale;
(c) The sales price and how such price was
determined;
(d) The commission
earned and received for such sale;
(e) A copy of any sales confirmation,
subscription agreement and other contract relating to the sale;
(f) The name and address of the purchaser;
and
(g) The name and address of any
person in addition to the agent who participated in the sale, a description of
the nature of the participation and the compensation or remuneration received
by such other person for his or her assistance.
(9) Any record required by this Rule to be
preserved and maintained may, after it is no longer required to be kept in an
easily accessible place, be maintained in any form admissible into evidence
pursuant to Code Section 24-5-26. Such records may be thus maintained at any
time if equipment for viewing and reproducing such records is immediately
accessible and any cost of such viewing or reproduction will be borne by the
broker-dealer or agent.
(10) Any
broker-dealer that is registered with the SEC, is a member of FINRA or is a
member of any national securities exchange registered with the SEC that
fulfills the reporting requirements of the SEC, FINRA or national securities
exchange, as it is required, shall be deemed to be in compliance with reporting
requirements of the Act and the Rules.
O.C.G.A. Secs.
10-5-40, 10-5-70, 10-5-74.
