Or. Admin. Code § 441-205-0180

Current through Register Vol. 63, No. 10, October 1, 2024

Section 441-205-0180 - Custody or Possession of Funds or Securities of Clients by Investment Advisers

(1) It shall constitute a "Fraudulent, Deceptive, or Manipulative Act or Practice," within the meaning of these rules, for any investment adviser who has custody or possession of any funds or securities in which any client has any beneficial interest, to do any act or take any action, directly or indirectly, with respect to any such funds or securities, unless:

(a) All such securities of each such client are segregated, marked to identify the particular client who has the beneficial interest therein, and held in safekeeping in some place reasonably free from risk of destruction or other loss; and

(b)

(A) All such funds of such clients are deposited in one or more bank accounts which contain only clients' funds;

(B) Such account or accounts are maintained in the name of the investment adviser as agent or trustee for such clients; and

(C) The investment adviser maintains a separate record for each such account which shows the name and address of the bank where such account is maintained, the dates and amounts of deposits in and withdrawals from such account and the exact amount of each client's beneficial interest in such account; and

(c) Such investment adviser, immediately after accepting custody or possession of such funds or securities from any client, notifies such client in writing of the place and manner in which such funds and securities will be maintained, and thereafter, if and when there is any change in the place or manner in which such funds or securities are being maintained, gives each such client written notice thereof; and

(d) Such investment adviser sends to each client, not less frequently than once every three months, an itemized statement showing the funds and securities in the custody or possession of the investment adviser at the end of such period; and

(e) All such funds and securities of clients are verified by actual examination at least once during each calendar year by an independent public accountant. A certificate of such accountant, stating that he has made an examination of such funds and securities and describing the nature and extent of such examination, shall be filed with the Director promptly after such examination.

(2) This rule shall not apply to an investment adviser also registered as a broker-dealer under ORS 59.165.

Or. Admin. Code § 441-205-0180

CC 12, f. 7-12-73, ef. 9-1-73, Renumbered from 815-030-0205.2-15 and 815-030-0190

Stat. Auth.: ORS 59

Stats. Implemented: ORS 59.205(2)