Iowa Admin. Code r. 191-50.41

Current through Regsiter Vol. 46, No. 26, June 12, 2024

Rule 191-50.41 - Bonding requirements for investment advisers

(1) Every investment adviser registered or required to be registered under the Act:

a. Having custody of or discretionary authority over client funds or securities shall be bonded in an amount determined by the administrator based upon the number of clients and the total assets under management of the investment adviser; and

b. Having custody of or discretionary authority over client funds or securities when the investment adviser does not meet the minimum net worth standard provisions of subrules 50.40(1) and 50.40(2) must be bonded in the amount of the net worth deficiency rounded up to the nearest $5,000.

(2) A bond required by this rule shall be issued by a company qualified to do business in this state in the form determined by the administrator and shall be subject to the claims of clients of the investment adviser regardless of the client's state of residence.

(3) An investment adviser that has a principal place of business in a state other than Iowa is exempt from this rule provided that the investment adviser is registered as an investment adviser in the state in which the investment adviser has its principal place of business and is in compliance with that state's laws regarding bonding requirements.

(4) For purposes of this rule, "custody" means the same as defined in paragraph 50.39(4)"b. "

This rule is intended to implement Iowa Code section 502.411(5).

Iowa Admin. Code r. 191-50.41

ARC 1076C, IAB 10/2/2013, effective 11/6/2013