§ 260.237.2. Minimum Financial Requirements.
10 CA ADC § 260.237.2Barclays Official California Code of RegulationsEffective: October 24, 2009
Effective: October 24, 2009
10 CCR § 260.237.2
§ 260.237.2. Minimum Financial Requirements.
(a) Every investment adviser who has custody of client funds or securities shall maintain at all times a minimum net worth of $35,000, and every investment adviser who has discretionary authority over client funds or securities but does not have custody of client funds or securities, shall maintain at all times a minimum net worth of $10,000.
(c) Unless otherwise exempted, as a condition of the right to continue to transact business in this state, every investment adviser shall, by the close of business on the next business day following the discovery that the investment adviser's net worth is less than the minimum required, notify the Commissioner that the investment adviser's net worth is less than the minimum required. After transmitting such notice, by the close of business on the next business day each investment adviser shall file a report with the Commissioner of its financial condition, including the following:
(d) For purposes of this rule, the term “net worth” shall mean an excess of assets over liabilities, as determined by generally accepted accounting principles, but shall not include as assets: prepaid expenses (except as to items properly classified as current assets under generally accepted accounting principles), deferred charges, goodwill, franchise rights, organizational expenses, patents, copyrights, marketing rights, unamortized debt discount and expense, and all other assets of intangible nature; home, home furnishings, automobile(s), and any other personal items not readily marketable in the case of an individual; advances or loans to stockholders and officers in the case of a corporation; and advances or loans to partners in the case of a partnership.
(h) Every investment adviser that has its principal place of business in a state other than this state shall maintain only such minimum capital as required by the state in which the investment adviser maintains its principal place of business, provided the investment adviser is licensed in such state and is in compliance with such state's minimum capital requirements.
(j) For purposes of subsection (c) of this rule, if the failure to discover that an investment adviser's net worth is less than the minimum required is the result of the investment adviser's failure to keep true, accurate and current the books and records required under Section 260.241.3, the investment adviser will be deemed to have discovered that the investment adviser's net worth is less that the minimum required by this section.
Credits
Note: Authority cited: Sections 25237 and 25610, Corporations Code. Reference: Sections 25237 and 25613, Corporations Code.
History
1. New section filed 3-4-2003; operative 4-3-2003 (Register 2003, No. 10).
2. Repealer of first paragraph and amendment of subsection (j) filed 9-24-2009; operative 10-24-2009 (Register 2009, No. 39).
This database is current through 5/3/24 Register 2024, No. 18.
Cal. Admin. Code tit. 10, § 260.237.2, 10 CA ADC § 260.237.2
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