2007 Minnesota Statutes

80A.66 SECTION 411; POSTREGISTRATION REQUIREMENTS.
    (a) Financial requirements. Subject to Section 15(h) of the Securities Exchange Act of
1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15
U.S.C. Section 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) Financial reports. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15
U.S.C. Section 78o(h)) or Section 222(b) of the Investment Advisers Act of 1940 (15 U.S.C.
Section 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) Record keeping. Subject to Section 15(h) of the Securities Exchange Act of 1934 (15
U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15 U.S.C.
Section 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 paragraph (1) may be maintained
in any form of data storage acceptable under Section 17(a) of the Securities Exchange Act of 1934
(15 U.S.C. Section 78q(a)) if they are readily accessible to the administrator; and
    (3) investment adviser records required to be maintained under paragraph (1) may be
maintained in any form of data storage required by rule adopted or order issued under this chapter.
    (d) Audits or inspections. 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 administrator, within or without this state, as the administrator 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 administrator may copy, and
remove for audit or inspection copies of, all records the administrator reasonably considers
necessary or appropriate to conduct the audit or inspection. The administrator may assess a
reasonable charge for conducting an audit or inspection under this subsection.
    (e) Custody and discretionary authority bond or insurance. Subject to Section 15(h) of
the Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment
Advisers Act of 1940 (15 U.S.C. Section 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 not to exceed $25,000. The administrator
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 section 80A.76(j)(2).
    (f) Requirements for custody. Subject to Section 15(h) of the Securities Exchange Act of
1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers Act of 1940 (15
U.S.C. Section 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) Investment adviser brochure rule. 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) Continuing education. A rule adopted or order issued under this chapter may
require an individual registered under section 80A.57 or 80A.59 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 80A.59.
History: 2006 c 196 art 1 s 26
NOTE: This section, as added by Laws 2006, chapter 196, article 1, section 26, is effective
August 1, 2007. Laws 2006, chapter 196, article 1, section 52.