2005 Minnesota Statutes

     80A.06 Postlicensing provisions. 

    Subdivision 1.    Record keeping.  Every licensed broker-dealer 
 and investment 
 adviser shall make and keep all accounts, correspondence, 
 memoranda, papers, books and other records which the 
 commissioner by rule prescribes by rule or order, except as 
 provided by section 15 of the Securities Act of 1934 in the case 
 of a broker-dealer and section 222 of the Investment Advisers 
 Act of 1940 in the case of an investment adviser.  All records 
 required shall be preserved for three years unless the 
 commissioner by rule prescribes otherwise for particular types 
 of records.  All required records shall be kept within the state 
 or shall, at the request of the commissioner, be made available 
 at any time for examination by the commissioner either in the 
 principal office of the licensee or by production of exact 
 copies thereof in this state. 

    Subd. 2.    Reports.  Every licensed broker-dealer and 
 investment 
 adviser shall file such reports as the commissioner by rule or 
 order prescribes except as provided in section 15 of the 
 Securities Exchange Act of 1934 in the case of a broker-dealer 
 and section 222 of the Investment Advisers Act of 1940 in the 
 case of an investment adviser.  

    Subd. 3.    Correcting amendments.  If the information contained 
 in any document 
 filed with the commissioner is or becomes inaccurate or 
 incomplete in any material respect, the licensee or federal 
 covered adviser shall within 30 days file a correcting amendment 
 unless notification of the correction has been given under 
 section 80A.04, subdivision 2.  

    Subd. 4.    Examinations.  The commissioner shall make periodic 
 examinations, within or without this state, of the business and 
 records of each licensed broker-dealer and investment adviser, 
 at such times and in such scope as the commissioner determines.  
 The examinations may be made without prior notice to the 
 broker-dealer or investment adviser.  For the purpose of 
 avoiding unnecessary duplication of examinations, the 
 commissioner, insofar as the commissioner deems it practicable 
 in administering this subdivision, may cooperate with securities 
 administrators of other states, the securities and exchange 
 commission, and any national securities exchange or national 
 securities association registered under the Securities Exchange 
 Act of 1934.  

    Subd. 5.    Remuneration and charges.  (a) Except as otherwise 
 provided in paragraph 
 (b), no investment adviser who shall recommend the purchase or 
 sale of a security to a client, and no licensed broker-dealer 
 acting as a broker-dealer for a customer in the purchase or sale 
 of a security shall take or accept any remuneration or other 
 thing of value from any person other than the client or customer 
 in connection with the purchase or sale unless, prior to or 
 contemporaneously with the recommendation in the case of an 
 investment adviser and prior to or contemporaneously with the 
 confirmation of the transaction in the case of a licensed 
 broker-dealer so acting, written disclosure to the client or 
 customer is made of the acceptance or intended acceptance of the 
 remuneration or other thing of value and of the amount of it.  
 All charges made by an investment adviser for services and all 
 charges by a licensed broker-dealer for services rendered as a 
 broker-dealer or for advice with respect to securities shall be 
 reasonable, and except in compliance with rules adopted by the 
 commissioner, no charges shall be based upon or measured by 
 profits accrued or to accrue from transactions recommended or 
 carried out by an investment adviser, or licensed 
 broker-dealer.  This subdivision shall not be construed to 
 prohibit charges by an investment adviser based upon the total 
 value of the assets under management averaged over a definite 
 period, or as of definite dates, or taken as of a definite date, 
 nor charges based upon the performance of the managed assets as 
 compared to an established index in compliance with rules 
 adopted by the commissioner.  

    (b) Disclosure of payment received by a licensed investment 
 advisor or licensed broker-dealer for directing order flow need 
 not comply with paragraph (a) if the disclosure is made in 
 compliance with rules governing disclosure of payments for 
 directing order flow adopted by the securities and exchange 
 commission. 

    HIST: 1973 c 451 s 6; 1986 c 444; 1987 c 336 s 9; 1995 c 148 s 
 1; 1996 c 439 art 2 s 3; 1997 c 222 s 16-18