S.D. Admin. R. 20:08:05:24

Current through Register Vol. 51, page 64, December 9, 2024

Section 20:08:05:24 - Bonding requirements for certain investment advisers

Any bond required by § 20:08:05:24 shall be issued by a company qualified to do business in this state in the form determined by the director and shall be subject to the claims of all clients of such investment adviser regardless of the client's state of residence.

(1) Every investment adviser registered or required to be registered under SDCL chapter 47-31 B having custody of or discretionary authority over client funds or securities shall be bonded in an amount determined by the director based upon the number of clients and the total assets under management of the investment adviser.

(2) Each investment adviser registered or required to be registered under chapter 47-31 B who has custody or discretion of client funds or securities who does not meet the minimum net worth standard as set forth in § 20:08:05:21(1) to (3), inclusive, shall be bonded in the amount of the net worth deficiency rounded up to the nearest $5,000.

(3) For purposes of § 20:08:05:24, the term, custody, is as defined in § 20:08:05:25(11).

(4) An investment adviser that has its principal place of business in a state other than this state is exempt from the requirements of § 20:08:05:24(1) and (2), if the investment adviser is registered or licensed as an investment adviser in the state where it has its principal place of business and is in compliance with such state's requirements relating to bonding.

S.D. Admin. R. 20:08:05:24

37 SDR 112, effective 12/9/2010.

General Authority: SDCL 47-31B-411(e), 47-31B-605(a)(2).

Law Implemented: SDCL 47-31B-411(e).