§ 260.241.2. Reports by Broker-Dealers and Investment Advisers.
10 CA ADC § 260.241.2Barclays Official California Code of RegulationsEffective: April 5, 2008
Effective: April 5, 2008
10 CCR § 260.241.2
§ 260.241.2. Reports by Broker-Dealers and Investment Advisers.
(1) The annual report for a broker-dealer shall contain a Statement of Financial Condition, a Statement of Income, a Statement of Changes in Stockholders' or Partners' or Sole Proprietor's Equity and a Statement of Changes in Liabilities Subordinated to Claims of General Creditors. Supporting schedules shall include a Schedule of Securities, a Computation of Net Capital under Rule 15c3-1 under the Securities Exchange Act of 1934 (17 CFR 240.15c3-1), a Computation for Determination of the Reserve Requirement under Rule 15c3-3(a) (17 CFR 240.15c3-3(a)), Information Relating to the Possession or Control Requirements under Rule 15c3-3 (17 CFR 240.15c3-3), and shall be filed with the annual report.
(3) The financial statements included in the annual report shall be prepared in accordance with generally accepted accounting principles and shall be audited by either an independent certified public accountant or independent public accountant; provided, however, the financial statements need not be audited if:
The broker-dealer or investment adviser has not held or accepted custody of funds and securities for or owed money or securities to customers or clients during the period covered by the report; and
(A) if the licensee is a broker-dealer, the securities business has been limited to soliciting subscriptions for securities of an issuer and the broker-dealer promptly forwarded the subscriptions to the issuer, underwriter, sponsor or other distributor of the securities and received checks, drafts, notes or other evidence of indebtedness payable solely to the issuer, underwriter, sponsor or distributor who delivered the securities purchased directly to the subscriber; and
(B) if the licensee is an investment adviser, the investment adviser only has discretionary authority over client funds or securities, the investment adviser has taken only limited powers of attorney to execute transactions on behalf of its clients, or the investment adviser does not accept prepayment of more than $500 per client for more than six months in advance; or
(2) neither the broker-dealer nor any partner, officer, or director thereof has any proprietary interest in any account classified solely as that of a customer. If the broker-dealer or investment adviser is a sole proprietorship, the verification shall be made by the proprietor; if a partnership, by a general partner; or if a corporation, by a duly authorized officer.
(c) Exemption. The provisions of subsection (a) of this section shall not apply to any broker-dealer registered under the Securities Exchange Act of 1934 (15 USC 78a et seq.), provided that, upon request of the Commissioner, the broker-dealer files with, or transmits for filing to, the Commissioner a copy of any report under Rule 17a-5 (17 CFR 240.17a-5).
(3) The report required by subsections (d)(1) and (d)(2) of this section shall be as of a date within the 15 day period. Additional reports shall be filed within 15 days after each subsequent monthly accounting period until three successive months have elapsed during which none of the conditions specified in subsection (d)(1) or (d)(2) of this section have occurred.
All of the statements filed pursuant to subsections (a), (c), and (d) shall be public, except that upon request an income statement that is bound separately from the balance of the annual financial statements shall be confidential, except in cases where the Commissioner determines that it is in the public interest to direct otherwise.
Credits
Note: Authority cited: Sections 25241 and 25610, Corporations Code. Reference: Sections 25237, 25241 and 25613, Corporations Code.
History
1. Amendment of subsection (d) filed 12-31-75 as an emergency; designated effective 1-1-76. Certificate of Compliance included (Register 76, No. 1). For prior history, see Register 75, No. 4.
2. Amendment filed 9-2-77; effective thirtieth day thereafter (Register 77, No. 36).
3. Amendment filed 4-27-84; effective thirtieth day thereafter (Register 84, No. 18).
4. Amendment of subsections (a) (2), (c) and (e) filed 1-7-88 operative 2-6-88 (Register 88, No. 4).
5. Amendment of section and Note filed 3-4-2003; operative 4-3-2003 (Register 2003, No. 10).
6. Amendment of section and Note filed 3-6-2008; operative 4-5-2008 (Register 2008, No. 10).
This database is current through 5/3/24 Register 2024, No. 18.
Cal. Admin. Code tit. 10, § 260.241.2, 10 CA ADC § 260.241.2
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