Fla. Admin. Code R. 69W-600.014

Current through Reg. 50, No. 217; November 5, 2024

Section 69W-600.014 - Books and Records Requirements

Except as otherwise provided herein, every dealer, investment adviser, branch office, and associated person conducting business in this state shall prepare and maintain on a current basis, and preserve for the periods of time specified, such records, prescribed herein, as are appropriate for said dealer's, investment adviser's, branch office's, or associated person's course of business, and are sufficient to provide an audit trail of all business transactions by said dealer, investment adviser, associated person, or branch office. Associated persons who conduct business from a branch office notice-filed in this state shall be exempt from the provisions of this rule.

(1) All dealers are required to prepare and maintain appropriate books and records relating to their business as described in SEC Rules 17a-3 or 17a, (17 C.F.R. §§ 240.17a-3, 240.17a-4), section 248.30 of Regulation S-P (17 C.F.R. § 248.30), section 240.15l-1 of Regulation Best Interest (17 C.F.R. § 240.15l-1), and MSRB Rules G-7, G-8 and G-9; and records evidencing compliance with Financial Industry Regulatory Authority (FINRA) Rule 1020 and FINRA rules contained in the Rule 2000 Series (Duties and Conflicts), Rule 3000 Series (Supervision and Responsibilities Relating to Associated Persons), Rule 4000 Series (Financial and Operational Rules), and Rule 5000 Series (Securities Offering and Trading Standards and Practices). The foregoing rules are incorporated by reference in Rule 69W-200.002, F.A.C.

(2) All investment advisers, notwithstanding the fact that the investment adviser is not registered or required to be registered under the Investment Advisers Act of 1940, shall prepare and maintain true, accurate and current records relating to their business as described in SEC Rule 204-2, (17 C.F.R. § 275.204-2), which is incorporated by reference in Rule 69W-200.002, F.A.C. Notwithstanding SEC Rule 204-2, (17 C.F.R. §275.204-2), investment adviser records requirements do not include Form CRS. Investment advisers shall have available for the Office of Financial Regulation at least the following records:

(a) All trial balances, financial statements prepared in accordance with United States generally accepted accounting principles, and internal audit working papers relating to the investment adviser's business as an investment adviser. For purposes of this paragraph, "financial statements" means balance sheets, income statements, cash flow statements and net worth computations as required by Rule 69W-600.0161, F.A.C.

(b) A list or other record of all accounts with respect to the funds, securities, or transactions of any client.

(c) A copy in writing of each agreement entered into by the investment adviser with any client.

(d) A file containing a copy of each record required by SEC Rule 204-2(11), (17 C.F.R. § 275.204-2(11)), including any communication by electronic media that the investment adviser circulates or distributes, directly or indirectly, to two or more persons, other than persons connected with the investment adviser.

(e) A copy of each written statement and each amendment or revision given or sent to any client or prospective client of the investment adviser in accordance with the provisions of SEC Rule 204-3, (17 C.F.R. § 275.204-3), which is incorporated by reference in Rule 69W-200.002, F.A.C., and a record of the dates that each written statement, and each amendment or revision was given or offered to be given to any client or prospective client who subsequently becomes a client.

(f) For each client that was obtained by the adviser by means of a solicitor to whom a cash fee was paid by the adviser, records required by SEC Rule 206(4)-1, ( 17 C.F.R. §275.206(4)-1), which is incorporated by reference in Rule 69W-200.002, F.A.C.

(g) All records required by SEC Rule 204-2(16), (17 C.F.R. § 275.204-2 (16)).

(h) A file containing a copy of all communications received or sent regarding any litigation involving the investment adviser or any associated person of the investment adviser or employee, and regarding any customer or client complaint.

(i) Written information about each investment advisory client that is the basis for making any recommendation or providing any investment advice to such client.

(j) Written procedures to supervise the activities of employees and associated persons of the investment adviser that are reasonably designed to achieve compliance with applicable securities laws and regulations.

(k) A file containing a copy of each document, other than any notices of general dissemination, that was filed with or received from any state or federal agency or self regulatory organization and that pertains to the registrant or its associated persons. Such file should contain, but is not limited to, all applications, amendments, renewal filings, and correspondence.

(l) A copy of each invoice the investment adviser sends to its clients each time an advisory fee is deducted from clients' accounts.

(3) Notwithstanding other record preservation requirements of this rule, the following records or copies shall be required to be maintained in the business location of the investment adviser from which the customer or client is being provided or has been provided with investment advisory services:

(a) Records required to be preserved under paragraphs (a)(3), (a)(7)-(11), (a)(14)-(15), (b) and (c) inclusive, of SEC Rule 204-2 of the Investment Advisers Act of 1940, (17 C.F.R. § 275.204-2); and,

(b) Records or copies required under the provision of paragraphs (a)(11) and (a)(16) of SEC Rule 204-2 of the Investment Advisers Act of 1940 (17 C.F.R. § 275.204-2), which records or related records identify the name of the associated person of the investment adviser providing investment advice from that business location, or which identify the business location's physical address, mailing address, electronic mailing address, or telephone number.

(4) No provisions of this rule, unless specifically designated as a required form, shall be deemed to require the preparation, maintenance, or preservation of a dealer's or investment adviser's books and records in a particular form or system, provided that whatever form or system utilized by such dealer's or investment adviser's course of business is sufficient to provide an audit trail of all business transactions.

(5) Every investment adviser that has its principal place of business in a state other than this state shall be exempt from the requirements of this rule, provided the investment adviser is licensed in such state and is in compliance with that state's record keeping requirements.

(6) All books and records described in this rule shall be preserved in accordance with the following:

(a) Those records required under subsection (1) of this rule shall be preserved for such periods of time as specified in either SEC Rule 17a-4, ( 17 C.F.R. §240.17a), or MSRB Rule G-9.

(b) Those records required under subsection (2) of this rule, shall be preserved for a period of not less than five (5) years while effectively registered with the Office of Financial Regulation, nor for less than five (5) years after withdrawal or expiration of registration in this State.

(c) Books and records required to be prepared under the provisions of subsection (3), shall be maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in the principal office of the investment adviser.

(d) Every investment adviser and associated person conducting business in this state shall preserve for the life of the client's account, and not less than 5 years after the closing of the client's account, documents required to be prepared and maintained in accordance with paragraphs (3)(c) and (3)(i).

(e) Each investment adviser registered or required to be registered in this state and which has a business location in this state shall maintain at such business location:

1. The records or copies required under the provisions of paragraphs (a)(3), (a)(7)-(10), (a)(14)-(15), (b), and (c) of SEC Rule 204-2, (17 C.F.R. § 275.204-2); and,

2. The records or copies required under the provisions of paragraphs (3)(a)-(k), above, related to customers or clients for whom the associated person of the investment adviser provides or has provided investment advisory services; and

3. The records or copies required under the provisions of paragraphs (a)(11) and (a)(16) of SEC Rule 204-2, (17 C.F.R. § 275.204-2), which records or related records identify the name of the associated person of the investment adviser or which identify the business location's physical address, mailing address, electronic mailing address, or telephone number. The records will be maintained for the period described in subsections (d) and (e), of SEC Rule 204-2, (17 C.F.R. § 275.204-2). The investment adviser shall be responsible for ensuring compliance with the provision of this subsection. SEC Rule 204-2, ( 17 C.F.R. §275-204-2).

(7) Where the investment adviser inadvertently held or obtained a client's securities or funds and returned them to the client within three business days or has forwarded third party checks within 24 hours, the investment adviser will be considered as not having custody but shall keep a ledger or other listing of all securities or funds held or obtained, including the following information:

(a) Issuer;

(b) Type of security and series;

(c) Date of issue;

(d) For debt instruments, the denomination, interest rate and maturity date;

(e) Certificate number, including alphabetical prefix or suffix;

(f) Name in which registered;

(g) Date given to the adviser;

(h) Date sent to client or sender;

(i) Form of delivery to client or sender, or copy of the form of delivery to client or sender; and,

(j) Mail confirmation number, if applicable, or confirmation by client or sender of the fund's or security's return.

Fla. Admin. Code Ann. R. 69W-600.014

Rulemaking Authority 517.03(1), 517.121(1), 517.1215 FS. Law Implemented 517.121(1), 517.1215 FS.

New 12-5-79, Amended 9-20-82, Formerly 3E-600.14, Amended 10-14-90, 8-1-91, 6-16-92, 1-11-93, 9-9-96, 6-22-98, 1-25-00, 10-30-03, Formerly 3E-600.014, Amended 10-23-06, 5-15-07, 11-22-10, 11-11-13, Amended by Florida Register Volume 40, Number 175, September 9, 2014 effective 9/22/2014, Amended by Florida Register Volume 41, Number 077, April 21, 2015 effective 5/6/2015, Amended by Florida Register Volume 42, Number 213, November 1, 2016 effective 11/15/2016, Amended by Florida Register Volume 45, Number 221, November 13, 2019 effective 11/26/2019, Amended by Florida Register Volume 47, Number 002, January 5, 2021 effective 1/18/2021, Amended by Florida Register Volume 49, Number 020, January 31, 2023 effective 2/14/2023, Amended by Florida Register Volume 50, Number 045, March 5, 2024 effective 3/21/2024.