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The Vermont Statutes Online



Title

09

:
Commerce and Trade






Chapter

150

:
SECURITIES ACT






Subchapter

004
:
BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS, INVESTMENT ADVISER REPRESENTATIVES, AND FEDERAL COVERED INVESTMENT ADVISERS










 

§

5411. Postregistration requirements

(a) Subject to

15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22, a rule adopted or order issued under

this chapter may establish minimum financial requirements for broker-dealers

registered or required to be registered under this chapter and investment

advisers registered or required to be registered under this chapter.

(b) Subject to

15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22, a broker-dealer registered or

required to be registered under this chapter and an investment adviser registered

or required to be registered under this chapter shall file such financial

reports as are required by a rule adopted or order issued under this chapter.

If the information contained in a record filed under this subsection is or

becomes inaccurate or incomplete in a material respect, the registrant shall

promptly file a correcting amendment.

(c) Subject to

15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22:

(1) a

broker-dealer registered or required to be registered under this chapter and an

investment adviser registered or required to be registered under this chapter

shall make and maintain the accounts, correspondence, memoranda, papers, books,

and other records required by rule adopted or order issued under this chapter;

(2)

broker-dealer records required to be maintained under subdivision (1) of this

subsection may be maintained in any form of data storage acceptable under 15

U.S.C. § 78q(a) if they are readily accessible to the Commissioner; and

(3) investment

adviser records required to be maintained under subdivision (1) of this

subsection may be maintained in any form of data storage required by rule

adopted or order issued under this chapter.

(d) The records

of a broker-dealer registered or required to be registered under this chapter

and of an investment adviser registered or required to be registered under this

chapter are subject to such reasonable periodic, special, or other audits or

inspections by a representative of the Commissioner, within or without this

State, as the Commissioner considers necessary or appropriate in the public

interest and for the protection of investors. An audit or inspection may be

made at any time and without prior notice. The Commissioner may copy, and

remove for audit or inspection copies of, all records the Commissioner

reasonably considers necessary or appropriate to conduct the audit or

inspection. The Commissioner may assess a reasonable charge for conducting an

audit or inspection under this subsection.

(e) Subject to

15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22, a rule adopted or order issued under

this chapter may require a broker-dealer or investment adviser that has custody

of or discretionary authority over funds or securities of a customer or client

to obtain insurance or post a bond or other satisfactory form of security in an

amount to be established by rule or order. The Commissioner may determine the

requirements of the insurance, bond, or other satisfactory form of security.

Insurance or a bond or other satisfactory form of security may not be required

of a broker-dealer registered under this chapter whose net capital exceeds, or

of an investment adviser registered under this chapter whose minimum financial

requirements exceed, the amounts required by rule or order under this chapter.

The insurance, bond, or other satisfactory form of security must permit an

action by a person to enforce any liability on the insurance, bond, or other

satisfactory form of security if instituted within the time limitations in

subdivision 5509(j)(2) of this chapter.

(f) Subject to

15 U.S.C. § 78o(h) or 15 U.S.C. § 80b-22, an agent may not have custody of

funds or securities of a customer except under the supervision of a

broker-dealer, and an investment adviser representative may not have custody of

funds or securities of a client except under the supervision of an investment

adviser or a federal covered investment adviser. A rule adopted or order issued

under this chapter may prohibit, limit, or impose conditions on a broker-dealer

regarding custody of funds or securities of a customer and on an investment

adviser regarding custody of securities or funds of a client.

(g) With respect

to an investment adviser registered or required to be registered under this

chapter, a rule adopted or order issued under this chapter may require that information

or other record be furnished or disseminated to clients or prospective clients

in this State as necessary or appropriate in the public interest and for the

protection of investors and advisory clients.

(h) A rule

adopted or order issued under this chapter may require an individual registered

under section 5402 or 5404 of this chapter to participate in a continuing

education program approved by the Securities and Exchange Commission and

administered by a self-regulatory organization or, in the absence of such a

program, a rule adopted or order issued under this chapter may require

continuing education for an individual registered under section 5404. (Added

2005, No. 11, § 1, eff. July 1, 2006.)