441-195-0010
Customer and Account Records by Broker-Dealers

(1) Every broker-dealer shall make and keep current a record for each account with a natural person as a customer or owner, which record shall state the customer’s or account owner’s name, address, tax identification or social security number, telephone number, date of birth, employment status (including occupation and whether the customer is an associated person of a broker-dealer), annual income, net worth (excluding value of primary residence), the account’s investment objectives, and whether the account includes the signatures of the associated person regularly handling the account and a supervisor designated pursuant to OAR 441-205-0210(2). In the case of a joint account, the account record must include personal information for each joint owner who is a natural person; however, financial information for the individual joint owners may be combined. For accounts in existence on the effective date of this amended rule, this information must be obtained no later than May 2, 2006.

(2) Any item of information required by section (1) of this rule need not be contained in the customer’s record if, after reasonable inquiry, the customer declines, neglects, or is unable to furnish or update such item of information and a statement to that effect is placed in such record.

(3) Every broker-dealer shall make and keep current a record indicating that:

(a) No later than May 2, 2006 for customers existing as of May 2, 2003, and no later than 30 days of the opening of an account for new customers since May 2, 2003, and thereafter at intervals no greater than 36 months, each customer or account owner was furnished with a copy of the account record or an alternate document with all information required by section (1) of this rule. This document may be mailed with the account statement, and may exclude any tax identification number and date of birth. The broker-dealer shall include an explanation of any terms regarding investment objectives, and shall include or accompany the document with prominent statements that the customer or owner should mark any corrections and return the account record or alternate document to the broker-dealer, and that the customer or owner should notify the broker-dealer of any future changes to information contained in the account record;

(b) For each account record updated to reflect a customer or account owner change of name or address, the broker-dealer sent a notification of that change to the customer’s old address, or to each joint owner, and the associated person, if any, responsible for that account, no later than 30 days after the broker-dealer received notice of the change;

(c) For each change in the account’s investment objectives the broker-dealer has furnished to each customer or owner and the associated person, if any, responsible for that account a copy of the updated customer account record or alternate document with all information required to be furnished in subsection (a) of this section no later than 30 days after the broker-dealer received notice of the change or after the account was updated for any reason other than the broker-dealer receiving notice of the change. The broker-dealer may elect to send this notification with the next statement scheduled to be mailed to the customer or owner;

(d) Each customer or account owner was furnished with a copy of each written agreement entered into on or after May 2, 2003 pertaining to that account and that, if requested by the customer or account owner, the customer or account owner was furnished with a fully executed copy of each agreement;

(e) Each customer of the broker-dealer has been provided with a notice containing the address and telephone number of the broker-dealer’s department to which any account-related complaints may be directed.

(4) Every broker-dealer shall make and keep current a record with respect to each discretionary account which shall include the dated signature of each customer or account owner granting the authority and the dated signature of each natural person to whom discretionary authority was granted.

(5) The account record requirements in section (1) of this rule and the furnishing requirement in subsection (3)(a) of this rule apply only to accounts for which the broker-dealer is, or within the preceding 36 months has been, required to make a suitability determination under federal securities laws or the requirements of a self-regulatory organization of which it is a member.

(6) Every broker-dealer shall make and keep current, as to each office, the books and records described in this rule. For purposes of this rule, “office” means any location where one or more associated persons regularly conduct the business of handling funds or securities or effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195
History:
FCS 1-2004, f. & cert. ef. 5-19-04
CC 12-1973, f. 7-12-73, cert. ef. 9-1-73, Renumbered from 815-030-0195 and 815-030-0081

441-195-0020
Business Records by Broker-Dealers

(1) Every broker-dealer shall make and keep current the following books and records relating to its business:

(a) Blotters (or other records of original entry) containing an itemized daily record of all purchases and sales of securities, all receipts and deliveries of securities (including certificate numbers), all receipts and disbursements of cash and all other debits and credits. Such records shall show the account for which each such transaction was effected, the name and amount of securities, the unit and aggregate purchase or sale price (if any), the trade date, and the name or other designation of the person from whom purchased or received or to whom sold or delivered;

(b) Ledgers (or other records) reflecting all assets and liabilities, income and expense and capital accounts;

(c) Ledger accounts (or other records) itemizing separately as to each cash and margin account of every customer and of such broker-dealer and partners thereof, all purchases, sales, receipts, and deliveries of securities and commodities for such accounts and all other debits and credits to such account;

(d) Ledgers (or other records) reflecting the following:

(A) Securities in transfer;

(B) Dividends and interest received;

(C) Securities borrowed and securities loaned;

(D) Monies borrowed and monies loaned (together with a record of the collateral therefor and any substitutions in such collateral); and

(E) Securities failed to receive and failed to deliver.

(e) A securities record or ledger reflecting separately for each security as of the clearance dates all "long" or "short" positions (including securities in safekeeping) carried by such broker-dealer for its account or for the account of its customers or partners and showing the location of all securities long and the offsetting position to all securities short, including long security count differences and short security count differences classified by the date of the physical count and verification in which they were discovered and, in all cases, the name or designation of the account in which each position is carried;

(f) A memorandum of each brokerage order, and of any other instruction, given or received for the purchase or sale of securities, whether executed or unexecuted. Such memorandum shall show the terms and conditions of the order or instructions and of any modification or cancellation thereof, the account for which entered, the time the order was received, the time of entry, the price at which executed, the identity of each associated person, if any, responsible for the account, the identity of any other person who entered or accepted the order on behalf of the customer or, if a customer entered the order on an electronic system, a notation of that entry, and, to the extent feasible, the time of execution or cancellation. The memorandum need not show the identity of any person, other than the associated person responsible for the account, who may have entered or accepted the order if the order is entered into an electronic system that generates the memorandum and if that system is not capable of receiving an entry of the identity of any person other than the responsible associated person; in that circumstance, the broker-dealer shall produce upon request by the director a separate record which identifies each other person. Orders entered pursuant to the exercise of discretionary power by such broker-dealer, or any employee thereof, shall be so designated. The term "Instruction" shall include instructions between partners and employees of a broker-dealer. The term "Time of Entry" shall mean the time when such broker-dealer transmits the order or instruction for execution;

(g) A memorandum of each purchase and sale of securities for the account of such broker-dealer showing the price and, to the extent feasible, the time of execution; and, in addition, where such purchase or sale is with a customer other than a broker-dealer, a memorandum of each order received, showing the time of receipt, the terms and conditions of the order and of any modification thereof, the account in which it was entered, the identity of each associated person, if any, responsible for the account, the identity of any other person who entered or accepted the order on behalf of the customer or, if a customer entered the order on an electronic system, a notation of that entry. The memorandum need not show the identity of any person other than the associated person responsible for the account who may have entered or accepted the order if the order is entered into an electronic system that generates the memorandum and if that system is not capable of receiving an entry of the identity of any person other than the responsible associated person; in that circumstance, the broker-dealer shall produce upon request by the director a separate record which identifies each other person. An order with a customer other than a broker-dealer entered pursuant to the exercise of discretionary authority by the broker-dealer, or associated person thereof, shall be so designated;

(h) Copies of confirmations of all purchases and sales of securities and copies of notices of all other debits and credits for securities, cash, and other items for the account of customers and partners of such broker-dealer;

(i) A record in respect of each cash and margin account with such broker-dealer containing the name and address of the beneficial owner of such account and, in the case of a margin account, the signature of such owner; provided that, in the case of a joint account or an account of a corporation, such records are required only in respect of the person or persons authorized to transact business for such account;

(j) A record of all puts, calls, spreads, straddles, and other options in which such broker-dealer has any direct or indirect interest or which such broker-dealer has granted or guaranteed, containing, at least, an identification of the security and the number of units involved;

(k) A record of the proof of money balances of all ledger accounts in the form of trial balances, and a record of the computation of aggregate indebtedness and net capital, as of the trial balance date;

(l) A questionnaire or application for employment executed by each partner, officer, director, branch manager, or any employee, except any person associated with a broker-dealer whose functions are solely clerical or ministerial, which questionnaire or application shall be approved in writing by an authorized representative of such broker-dealer and shall contain at least the following information with respect to such person:

(A) The associated person's name, address, Social Security number, date of birth and the starting date of the associated person's employment or other association with the broker-dealer;

(B) A complete consecutive statement of all the associated person's business connections for at least the preceding ten years, including whether the employment was part-time or full-time;

(C) A record of any denial of membership or registration, and of any disciplinary action taken, or sanction imposed upon the associated person by any federal or state agency, or by any national securities exchange or national securities association, including any finding that the associated person was a cause of any disciplinary action or had violated any law;

(D) A record of any denial, suspension, expulsion or revocation of membership, or registration of any broker-dealer with which the associated person was associated in any capacity when such action was taken;

(E) A record of any permanent or temporary injunction entered against the associated person or any broker-dealer with which the associated person was associated in any capacity at the time such injunction was entered;

(F) A record of any arrest or indictment for any felony, or any misdemeanor pertaining to securities, commodities, banking, insurance or real estate (including, but not limited to, acting or being associated with a broker-dealer, investment company, investment adviser, futures sponsor, bank, or savings and loan association), fraud, false statements or omissions, wrongful taking of property or bribery, forgery, counterfeiting or extortion, and the disposition of the foregoing;

(G) A record of any other name or names by which the associated person has been known or which the associated person has used; provided, however, that if such associated person has been registered as a registered representative of such broker-dealer, or the associated person's employment has been approved by, the Financial Industry Regulatory Authority, the American Stock Exchange LLC, the NASDAQ OMX BX, the Chicago Stock Exchange, Inc., the New York Stock Exchange, Inc., the NASDAQ OMX PHLX, LLC, the Chicago Board Options Exchange, Inc., the National Stock Exchange, Inc. or the International Securities Exchange, then retention of a full, correct, and complete copy of any and all applications for such registration or approval shall be deemed to satisfy the requirements of section (1) of this rule;

(m) Fingerprint records together with any information received from the United States Attorney General or its designee for every person required to be fingerprinted under the Securities Exchange Act of 1934;

(n) A record as to each associated person of each written customer complaint received by the broker-dealer concerning that associated person. The record shall include the complainant's name, address, and account number; the date the complaint was received; the name of any other associated person identified in the complaint; a description of the nature of the complaint; and the disposition of the complaint. Instead of the record, a broker-dealer may maintain a copy of each original complaint in a separate file by the associated person named in the complaint along with a record of the disposition of the complaint;

(o) A record listing every associated person of the broker-dealer which shows, for each associated person, every office of the broker-dealer where the associated person regularly conducts the business of handling funds or securities or effecting any transactions in, or inducing or attempting to induce the purchase or sale of any security for the broker-dealer, and the Central Registration Depository number, if any, and every internal identification number or code assigned to that person by the broker-dealer;

(p) A record as to each associated person listing each purchase and sale of a security attributable, for compensation purposes, to that associated person. The record shall include the amount of compensation if monetary and a description of the compensation if non-monetary. In lieu of making this record, a broker-dealer may elect to produce the require information promptly upon request of the director;

(q) A record of all agreements pertaining to the relationship between each associated person and the broker-dealer including a summary of each associated person's compensation arrangement or plan with the broker-dealer, including commission and concession schedules and, to the extent that compensation is based on factors other than remuneration per trade, the method by which the compensation is determined;

(r) A record, which need not be separate from the advertisements, sales literature, or communications, documenting that the broker-dealer has complied with, or adopted policies and procedures reasonably designed to establish compliance with, applicable federal requirements and rules of a self-regulatory organization of which the broker-dealer is a member that require advertisements, sales literature, or any other communications with the public by a broker-dealer or its associated persons be approved by a principal;

(s) A record for each office listing, by name or title, each person at that office who, without delay, can explain the types of records the firm maintains at that office and the information contained in those records;

(t) A record listing each principal of the broker-dealer responsible for establishing policies and procedures that are reasonably designed to ensure compliance with any applicable federal requirements or rules of a self-regulatory organization of which the broker-dealer is a member that require acceptance or approval of a record by a principal.

(u) The following record regarding any internal broker-dealer system of which such broker-dealer is the sponsor:

(A) A record of the broker-dealer's customers that have access to the system (identifying any affiliations between such customers and the broker-dealer);

(B) Daily summaries of trading in the system, including securities for which transactions have been executed through use of such system and transaction volume (separately stated for trading occurring during hours when consolidated trade reporting facilities are and are not in operation); and

(C) Time-sequenced records of each transaction effected through the system, including date and time executed, price, size, security traded, counterparty identification information, and method of execution (if the system allows alternative means or locations for execution, such as routing to another market, matching with limit orders, or executing against the quotations of the broker-dealer sponsoring the system).

(2) This rule shall not be deemed to require a member of a national securities exchange to make or keep such records of transactions cleared for such member by another member as are customarily made and kept by the clearing member.

(3) This rule shall not be deemed to require a broker-dealer to make or keep such records as are required by section (1) of this rule reflecting the sale of U.S. Tax Savings Notes, U.S. Defense Savings Stamps, or U.S. Defense Savings Bonds, Series E, F, and G.

(4) The records specified in section (1) of this rule shall not be required with respect to any cash transaction of $100 or less involving only subscription rights or warrants which by their terms expire within 90 days after the issuance thereof.

(5) Every broker-dealer shall make and keep current, as to each office, the books and records described in subsections (1)(a), (1)(f), (1)(g), and (1)(l) through (1)(s) of this rule. For purposes of this rule, "office" means any location where one or more associated persons regularly conduct the business of handling funds or securities or effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195
History:
FCS 1-2012, f. & cert. ef. 7-9-12
FCS 1-2004, f. & cert. ef. 5-19-04
CC 12, f. 7-12-73, cert. ef. 9-1-73, Renumbered from 815-030-0195 and 815-030-0085

441-195-0030
Records to be Preserved by Certain Broker-Dealers

(1) Every broker-dealer subject to OAR 441-195-0020 shall preserve for a period of not less than six years all records required to be made pursuant to 441-195-0020(1)(a), (b), (c), (e), (r) (s), (t), and analogous records created pursuant to 441-195-0020(5). The records for the most recent two years shall be kept in an easily accessible place.

(2) Every such broker-dealer shall preserve for a period of not less than three years, with the most current two years being kept in an easily accessible place:

(a) All records required to be made pursuant to OAR 441-195-0020(1)(d), (f), (g), (h), (i), (j), (n), (p), (r), (u), and analogous records made pursuant to 441-195-0020(5);

(b) All checkbooks, bank statements, canceled checks, and cash reconciliations;

(c) All bills receivable or payable (or copies thereof), paid or unpaid, relating to the business of such broker-dealer, as such;

(d) Originals of all communications received and copies of all communications sent (and any approvals thereof) by such broker-dealer (including interoffice memoranda and communications) relating to its business as such, including all communications which are subject to rules of a self-regulatory organization of which the broker-dealer is a member regarding communications with the public. As used in this subsection, the term communications includes sales scripts;

(e) All trial balances, computations of aggregate indebtedness and net capital (and working papers in connection therewith), financial statements, branch office reconciliations and internal audit working papers, relating to the business of such broker-dealer, as such;

(f) All guarantees of accounts and all powers of attorney and other evidence of the granting of any discretionary authority given in respect of any account, and copies of resolutions empowering an agent to act on behalf of a corporation;

(g) All written agreements (or copies thereof) entered into by such broker-dealer relating to its business as such, including agreements with respect to any account;

(h) All notices relating to an internal broker-dealer system provided to the customers of the broker-dealer that sponsors such internal broker-dealer system. Notices, whether written or communicated through the internal broker-dealer trading system or other automated means, shall be preserved under this subsection if they are provided to all customers with access to an internal broker-dealer system, or to one or more classes of customers. Examples of notices to be preserved under this subsection include, but are not limited to, notices addressing hours of system operations, system malfunctions, changes to system procedures, maintenance of hardware and software, and instructions pertaining to access to the internal broker-dealer system.

(3) Every broker-dealer shall preserve for a period of not less than six years after the closing of any customer’s account any account cards or records which relate to the terms and conditions with respect to the opening and maintenance of such account.

(4) Every broker-dealer shall preserve during the life of the enterprise and of any successor enterprise all partnership articles or, in the case of a corporation, all Articles of Incorporation or Charter, minute books and stock certificate books (or, in the case of any other form of legal entity, all records such as articles of organization or formation, and minute books used for a purpose similar to those records required for corporations or partnerships), all Forms BD, all Forms BDW, all amendments to these forms, and all licenses or other documentation showing the registration of the broker-dealer with any securities regulatory authority.

(5) Every broker-dealer shall maintain and preserve in an easily accessible place:

(a) All records required under OAR 441-195-0020(1)(l) and (1)(o) until at least three years after the associated person has terminated the associated person’s employment and any other connection with the broker-dealer;

(b) All records required under OAR 441-195-0020(1)(m) until at least three years after the termination of employment or association of those persons required to be fingerprinted under the Securities Exchange Act of 1934;

(c) All account record information required pursuant to OAR 441-195-0010(1), (3) and (4) until at least six years after the earlier of the date the account was closed or the date on which the information was replaced or updated;

(d) Each report which a securities regulatory authority has requested or required the broker-dealer to make and furnish to it pursuant to an order or settlement, and each securities regulatory authority examination report until three years after the date of the report;

(e) Each compliance, supervisory, and procedures manual, including any updates, modifications, and revisions to the manual, describing the policies and practices of the broker-dealer with respect to compliance with applicable laws and rules, and supervision of the activities of each natural person associated with the broker-dealer until three years after the termination of the use of the manual;

(f) All reports produced to review for unusual activity in customer accounts until eighteen months after the date the report was generated. In lieu of maintaining the reports, a broker-dealer may produce promptly the reports upon request by the director. If a report was generated in a computer system that has been changed in the most recent eighteen month period in a manner such that the report cannot reproduced using historical data in the same format as it was originally generated, the report may be produced by using the historical data in the current system, but must be accompanied by a record explaining each system change which affected the reports.

(6) The records required to be maintained and preserved pursuant to OAR 441-195-0010, 441-195-0020 and this rule may be immediately produced or reproduced on microfilm, microfiche, or any similar medium, or on any digital storage medium or system, and may be maintained and preserved for the required time in that form. If such substitution for hard copy is made by a broker-dealer, it shall:

(a) At all times have available for examination of its records facilities for immediate, easily readable projection or production of the media or images and for producing easily readable images;

(b) Arrange the records and index in such a manner as to permit the immediate location of any particular record;

(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 substitute storage media for the time required.

(7) If a person who has been subject to OAR 441-195-0020 ceases to be licensed pursuant to ORS 59.165 or such other statute dealing with licensing, such person shall, for the remainder of the periods of time specified in this rule, continue to preserve the records which it theretofore preserved pursuant to this rule.

(8) Every broker-dealer shall furnish promptly to the director legible, true, complete, and current copies of those records of the broker-dealer that are required to be preserved under this rule, or any other records of the broker-dealer that are requested by the director.

(9) Records for the most recent two year period required to be made pursuant to OAR 441-195-0010(6) and subsections (2)(d) and (5)(d) of this rule which relate to an office shall be maintained at the office to which they relate. If an office is a private residence where only one associated person (or multiple associated persons who reside at that location and are members of the same immediate family) regularly conducts business, and it is not held out to the public as an office nor are funds or securities of any customer of the broker-dealer handled there, the broker-dealer need not maintain records at that office, but the records must be maintained at another location within the same state as the broker-dealer may select. Rather than maintain the records at each office, the broker-dealer may choose to produce the records promptly at the request of the director at the office to which they relate or at another location agreed to by the director.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195
History:
FCS 1-2004, f. & cert. ef. 5-19-04
CC 12-1973, f. 7-12-73, cert. ef. 9-1-73, Renumbered from 815-030-0195 and 815-030-0090

441-195-0040
Books and Records to Be Maintained by Investment Advisers

(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.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195
History:
CC 12-1973, f. 7-12-73, ef. 9-1-73, Renumbered from 815-030-0195, 815-030-0095

441-195-0050
Reports by Broker-Dealers and Investment Advisers

(1) General Rule. Every broker-dealer and every investment adviser who takes any discretionary authority from any investment advisory client to execute transactions or has custody of any investment advisory client’s securities or funds, shall file reports of financial conditions containing the information required by a form to be supplied or approved by the Director, as follows:

(a) The report shall be filed annually reflecting the financial condition as of the end of the fiscal year;

(b) Whenever the Director so requires, an interim report shall be filed as of the date and within the period specified by the Director.

(2) Nature and Form of Reports. Each report of financial condition filed pursuant to section (1) of this rule shall be prepared and filed in accordance with the following requirements:

(a) The report required by subsections (1)(a) and (b) of this rule of a broker-dealer or investment adviser shall be certified by a certified public accountant or a public accountant who shall be in fact independent; provided, however, that such report need not be certified if such broker-dealer or investment adviser is a member of the National Association of Securities Dealers and since the date of the previous financial statement or report filed pursuant to this rule:

(A) Said broker-dealer or investment adviser has not transacted a business in securities directly with or for other than members of a national securities exchange, has not carried any margin account, credit balance or security for any person other than a general partner and has not been required to file a certified financial statement with any national securities exchange; or

(B) His or its securities business has been limited to acting as broker (agent) for the issuer, said broker-dealer has promptly transmitted to such issuer all funds and promptly delivered to the subscriber all securities received in connection therewith and said broker-dealer has not otherwise held funds or securities for or owed money or securities to customers; or

(C) His or its securities has been limited to buying and selling evidences of indebtedness secured by mortgage, deed of trust, or other lien upon real estate or leasehold interest and said broker-dealer has not carried any margin account, credit balance or security for any securities customer. A broker-dealer or investment adviser who files a report which is not certified shall include in the oath or affirmation required by subsection (2)(b) of this rule a statement of the facts and circumstances relied upon as a basis for exemption from the certification requirements.

(b) Attached to the report shall be an oath or affirmation that, to the best knowledge and belief of the person making such oath or affirmation:

(A) The financial statement and supporting schedules are true and correct; and

(B) Neither the broker-dealer nor investment adviser, nor any partner, officer or director, as the case may be, has any proprietary interest in any account classified solely as that of a customer. The oath or affirmation shall be made before a person duly authorized to administer such oaths or affirmations. If the broker-dealer or investment adviser is a sole proprietorship, the oath or affirmation shall be made by the proprietor; if a partnership, by a general partner; or if a corporation, by a duly authorized officer.

(3) Extension of Time for Filing Reports. In the event any broker-dealer or investment adviser finds that he cannot file his report for any year within the time specified in section (1) of this rule without undue hardship, he may file with the Director an application for an extension of time to a specified date which shall not be more than 90 days after the date as of which financial condition is reported. The application shall state the reasons for the requested extension and shall contain an agreement to file the report on or before the specified date. The application shall be deemed granted unless the Director, within ten days after receipt thereof, enters an order denying the application.

(4) Exemption. The provisions of section (1) of this rule shall not apply to any broker-dealer registered under the Securities Exchange Act of 1934, provided that such broker-dealer files with, or transmits for filing to, the Director a copy of such report on Form X-17A-5 (or any form in substitution therefor) filed with the Securities and Exchange Commission and verified as provided in section (2) of this rule, not later than the date on which such report is required to be filed with the Securities and Exchange Commission.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195
History:
CC 12-1973, f. 7-12-73, ef. 9-1-73, Renumbered from 815-030-0195, 815-030-0100

441-195-0060
Notice of Complaint

(1) Each broker-dealer and each investment adviser who has filed a complaint against any of its partners, officers, directors, or associated persons registered in Oregon, with any law enforcement agency, any other regulatory agency having jurisdiction over the securities industry, or with any bonding company regarding any loss arising from alleged acts of such person, shall send a copy of such complaint to the Director within ten days following its filing with such other agency or bonding company.

(2) A copy of any finding, censure, fine, suspension, or expulsion made as a result of any such complaint shall be filed with the Director within ten days following such action.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.195, 59.205 & 59.235
History:
CC 12-1973, f. 7-12-73, ef. 9-1-73, Renumbered from 815-030-0195

441-195-0070
Discretionary Authority

(1) No broker-dealer, or any associated person, shall exercise any discretionary power or authority for any customer unless such customer has given prior written authorization to exercise such power or authority to a stated associated person or persons.

(2) This rule shall not apply to transactions in which the broker-dealer’s discretion is limited to the price at which or the time when an order given by a customer for the purchase or sale of a definite amount of a specified security shall be executed.

Statutory/Other Authority: ORS 59
Statutes/Other Implemented: ORS 59.135 & 59.205
History:
CC 12-1973, f. 7-12-73, ef. 9-1-73, Renumbered from 815-030-0200, 815-030-0110