Current through Register Vol. 63, No. 9, September 1, 2024
(1) Every
investment adviser shall make and keep true, accurate, and current the
following books and records relating to his investment advisory business:
(a) A journal or journals, including cash
receipts and disbursements records, and any other records of original entry
forming the basis of entries in any ledger;
(b) General and auxiliary ledgers (or other
comparable records) reflecting asset, liability, reserve, capital, income and
expense accounts;
(c) A memorandum
of each order given by the investment adviser for the purchase or sale of any
security, of any instruction received by the investment adviser from a client
concerning the purchase, sale, receipt or delivery of a particular security and
of any modification or cancellation of any such order or instruction. Such
memoranda shall show the terms and conditions of the order, instruction,
modification or cancellation; shall identify the person connected with the
investment adviser who recommended the transaction to the client and the person
who placed such order; and shall show the account for which entered, the date
of entry and the bank or broker-dealer by or through whom executed where
appropriate. Orders entered pursuant to the exercise of discretionary power
shall be so designated;
(d) All
checkbooks, bank statements, canceled checks and cash reconciliations of the
investment adviser;
(e) All bills
or statements (or copies thereof) paid or unpaid, relating to the business of
the investment adviser as such;
(f)
All trial balances, financial statements and internal audit working papers
relating to the business of such investment adviser;
(g) Originals of all written communications
received and copies of all written communications sent by such investment
adviser relating to:
(A) Any recommendation
made or proposed to be made and any advice given or proposed to be
given;
(B) Any receipt,
disbursement or delivery of funds or securities; or
(C) The placing or execution of any order to
purchase or sell any security; provided, however, that the investment adviser
shall not be required to keep any unsolicited market letters and other similar
communications of general public distribution not prepared by or for the
investment adviser; and provided that, if the investment adviser sends any
notice, circular or other advertisement offering any report, analysis,
publication, or other investment advisory service to more than ten persons, the
investment adviser shall not be required to keep a record of the names and
addresses of the persons to whom it was sent, except that if such notice,
circular or advertisement is distributed to persons named on any list, the
investment adviser shall retain with the copy of such notice, circular or
advertisement a memorandum describing the list and the source
thereof;
(h) A list or
other record of all accounts in which the investment adviser is vested with any
discretionary power with respect to the funds, securities, or transactions of
any client;
(i) All powers of
attorney and other evidences of the granting of any discretionary authority by
any client to the investment adviser, or copies thereof;
(j) All written agreements (or copies
thereof) entered into by the investment adviser with any client or otherwise
relating to the business of such investment adviser as such;
(k) A copy of each notice, circular,
advertisement, newspaper article, investment letter, bulletin, or other
communication recommending the purchase or sale of a specific security which
the investment adviser circulates or distributes, directly or indirectly, to
ten or more persons (other than investment supervisory clients or persons
connected with such investment adviser), and if such notice, circular,
advertisement, newspaper articles, investment letter, bulletin, or other
communication does not state the reasons for such recommendation, a memorandum
of the investment adviser indicating the reasons therefor.
(2) If an investment adviser has custody or
possession of securities or funds of any client, the records required to be
made and kept under section (1) of this rule shall include:
(a) A journal or other record showing all
purchases, sales, receipts, and deliveries of securities (including certificate
numbers) for such accounts and all other debits and credits to such
accounts;
(b) A separate ledger
account for each such client showing all purchases, sales receipts and
deliveries of securities, the date and price of each such purchase or sale and
all debits and credits;
(c) Copies
of confirmations of all transactions effected by or for the account of any such
client;
(d) A record for each
security in which any such client has a position, which record shall show the
name of each such client having any interest in such security, the amount of
the interest of each such client and the location of each such
security.
(3) Every
investment adviser who renders any investment supervisory or management service
to any client shall, with respect to the portfolio being supervised or managed
and to the extent that the information is reasonably available to or obtainable
by the investment adviser, make and keep true, accurate and current:
(a) Records showing separately for each such
client the securities purchased and sold and the date, amount and price of each
such purchase or sale;
(b) For each
security in which any such client has a current position, information from
which the investment adviser can promptly furnish the name of each such client
and the current amount of the interest of such client.
(4) Any books or records required by this
section may be maintained by the investment adviser in such manner that the
identity of any client to whom such investment adviser renders investment
supervisory services is indicated by numerical or alphabetical code or some
similar designation.
(5)
(a) All books and records required to be made
under the provisions of section (1) to subsection (3)(a) of this rule,
inclusive, of this rule shall be maintained and preserved in an easily
accessible place for a period of not less than six years from the end of the
fiscal year during which the last entry was made on such record. The records
for the most recent two years shall be kept in an appropriate office of the
investment adviser;
(b) Charter
documents, minute books and stock certificate books of the investment adviser
and of any predecessor shall be maintained in the principal office of the
investment adviser and preserved until at least three years after termination
of the enterprise.
(6)
An investment adviser, before ceasing to conduct or discontinue business as an
investment adviser, shall arrange for and be responsible for the preservation
of the books and records required to be maintained and preserved under this
rule for the remainder of the period specified in this rule.
(7) The records required to be maintained and
preserved pursuant to this rule may be immediately produced or reproduced on
microfilm and may be maintained and preserved for the required time in that
form. If such microfilm substitution for hard copy is made by an investment
adviser, he shall:
(a) At all times have
available for examination of his records facilities for immediate, easily
readable projection of the microfilm and for producing easily readable
facsimile enlargements;
(b) Arrange
the records and index and file the films in such a manner as to permit the
immediate location of any particular records;
(c) Be ready at all times to provide, and
immediately provide, any facsimile enlargement which may be requested;
and
(d) Store separately from the
original one other copy of the microfilm for the time required.
(8)
(a) Any book or other record made, kept,
maintained and preserved in compliance with OAR
441-195-0020 and
441-195-0030, which is
substantially the same as the book or other record required to be made, kept,
maintained and preserved under this rule, shall satisfy the requirements of
this rule;
(b) A record made and
kept pursuant to any provision of section (1) of this rule, which contains all
the information required under any other provision of section (1) need not be
maintained in duplicate in order to meet the requirements of the other
provisions of section (1) of the rule.
(9) As used in this rule, the terms "Power of
Attorney" and "Discretionary Authority" do not include discretion as to the
price at which or the time when a transaction is or is to be effected, if,
before the order is given by the investment adviser, the client has directed or
approved the purchase or sale of a definite amount of the particular
security.
Stat. Auth.: ORS
59
Stats. Implemented: ORS
59.195
