Current through Register Vol. 48, No. 12, March 22, 2024
a) Every dealer registered by the Secretary
of State shall keep the following books and records:
1) 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. The record shall show the account for which each transaction was
effected, the name and amount of securities, the unit and aggregate purchase or
sale price (if any), the trade date, and the name or other designation of the
person from whom purchased or received or to whom sold or delivered;
2) ledgers (or other records) reflecting all
assets and liabilities, income, and expense and capital accounts;
3) ledger accounts itemizing separately as to
each cash and margin account of every customer and of the dealer and partners
thereof, all purchases, sales, receipts and deliveries of securities and
commodities for the account and all other debits and credits to the
account;
4) ledgers (or other
records) reflecting the following:
A)
securities in transfer
B) dividends
and interest received
C) securities
borrowed and securities loaned
D)
monies borrowed and monies loaned (together with a record of the collateral
thereof and any substitutions in the collateral)
E) securities failed to receive and failed to
deliver;
5) 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 the dealer for its account or for the account of its customers or
partners and showing the location of all securities long and offsetting
position to all securities short and in all cases the name or designation of
the account in which each position is carried;
6) 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. The memorandum shall show the terms
and conditions of the order or instructions and of any modification or
cancellation thereof, the account for which entered, the time of entry, the
price at which executed and, to the extent feasible, the time of execution or
cancellation. Orders entered pursuant to the exercise of discretionary power by
the dealer, or any employee thereof, shall be so designated. The term
"instruction" shall be deemed to include instructions between partners and
employees of a dealer. The term "time of entry" shall be deemed to mean the
time when such dealer transmits the order or instruction for execution, or, if
it is not so transmitted, the time when it is received;
7) a memorandum of each purchase and sale of
securities for the account of the dealer showing the price and, to the extent
feasible, the time of execution;
8)
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 account of customers and partners of the dealer;
9) a record in respect of each cash and
margin account with the dealer containing the name and address of the
beneficial owner; provided that, in the case of a joint account or an account
of a corporation, the records are required only in respect of the person or
persons authorized to transact business for the account;
10) a record of all puts, calls, spreads,
straddles and other options in which the dealer has any direct or indirect
interest or which the dealer has granted or guaranteed, containing, at least,
an identification of the security and the number of units involved.
b) This Section shall not be
deemed to require a member of a national securities exchange to make or keep
records of transactions cleared for the member by another member as are
customarily made and kept by the clearing member.
c) Every dealer registered by the Secretary
of State shall preserve, for a period of not less than 3 years, the first 2
years in an easily accessible place:
1) all
check books, bank statements, cancelled checks and cash
reconciliations;
2) all bills
receivable or payable (or copies thereof), paid or unpaid, relating to the
business of the dealer;
3)
originals of all communications received and copies of all communications sent
by the dealer (including interoffice memoranda and communications) relating to
the business of the dealer;
4) all
trial balances, computation of aggregate indebtedness and net capital (and
working papers in connection therewith), financial statements, branch office
reconciliations and internal audit working papers relating to the business of
the dealer;
5) all guarantees of
accounts and all powers of attorney and other evidence of the granting of any
discretionary authority given in respect of any account, and copies of the
resolution empowering an agent to act on behalf of a corporation;
6) all written agreements (or copies thereof)
entered into by a dealer relating to business of the dealer, including
agreements with respect to any account.
d) For a period of not less than 3 years
after the closing of any customer's account, any account cards or records which
relate to the terms and conditions with respect to the opening and maintenance
of the account shall be preserved by every registered dealer.
e) Every registered dealer shall preserve
during the life of the enterprise and of any successor enterprise all
partnership agreements, certificates or articles or, in the case of a
corporation, all articles of incorporation or charter, minute books and stock
certificate books.
f) After a
record or other documents have been preserved for 2 years, a photograph thereof
on film may be substituted therefor for the balance of the required
time.
g) Every dealer registered by
the Secretary of State shall maintain within this State, in an easily
accessible place, all records required by this Section. A written request for
the waiver of the provisions of this Section may be made to the Secretary of
State to permit any registered dealer to maintain any of the records required
by this Section, in some place other than the State of Illinois. In determining
whether or not the provisions of this Section should be waived, the Secretary
of State shall consider, among other things, whether the main office of the
dealer is in a place outside the State of Illinois or whether the dealer clears
all or some of its transactions and uses all or some of the bookkeeping
facilities of some other dealer whose main office is outside the State of
Illinois.
h) The records (or a copy
thereof) required by this Section must be maintained in each office in this
State, if any, from which the transaction with respect to those records
occurred.
i) Every dealer shall
disclose in writing to customers at the time of opening an account, any
custody, service, maintenance or similar fee that may be charged to the
customer and the basis upon which each charge is determined. Customers shall
receive written notice at least 45 days prior to the imposition of any new
custody, service, maintenance or similar fee, or any changes to existing fees
of that nature.