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§ 280.650. Records to Be Maintained by Capital Access Companies.

10 CA ADC § 280.650BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS

Barclays Official California Code of Regulations Currentness
Title 10. Investment
Chapter 3. Commissioner of Financial Protection and Innovation
Subchapter 2.3. Capital Access Companies
Article 11. Books and Records
10 CCR § 280.650
§ 280.650. Records to Be Maintained by Capital Access Companies.
(a) Every licensed capital access company shall maintain and keep true, current, and accurate the accounts, books, and other documents relating to its business which constitute the record forming the basis for financial statements required to be filed pursuant to Section 28501 of the Corporations Code.
(b) Every licensed capital access company shall maintain and keep current the following books, accounts, and other documents:
(1) Journals (or other records of original entry) containing an itemized daily record in detail of all purchases and sales of securities (including sales and redemption of its own securities), all receipts and deliveries of securities (including certificate numbers if such detail is not recorded by custodian or transfer agent), all receipts and disbursements of cash and all other debits and credits. Such records shall show for each such transaction the name and quantity of securities, the unit and aggregate purchase or sale price, commission paid, the market on which effected, the trade date, the settlement date, and the name of the person through or from whom purchased or received or to whom sold or delivered. and, in a subsidiary portfolio investment record, provide the complete legal name and accounting and other information (including sufficient information to calculate coupons, accruals, maturities, puts, and calls) necessary to identify, value, and account for each investment.
(2) General and auxiliary ledgers (or other records) reflecting all assets, liability, reserve, capital, income and expense accounts, including:
(i) Separate ledger accounts (or other records) reflecting the following:
(a) Securities in transfer (stated in terms of securities quantities only);
(b) Securities in physical possession; (stated in terms of securities quantities only)
(c) Securities borrowed and securities loaned (stated in dollar amounts and securities quantities as appropriate);
(d) Monies borrowed and monies loaned together with a record of the collateral therefor and substitutions in such collateral (stated in dollar amounts and securities quantities as appropriate);
(e) Dividends and interest received (stated in dollar amounts only);
(f) Dividend receivable and interest accrued (stated in dollar amounts only).
(ii) Separate ledger accounts (or other records) for each portfolio security, showing (as of trade dates):
(a) the quantity and unit and aggregate price for each purchase, sale, receipt, and delivery of securities and commodities for such accounts, and
(b) all other debits and credits for such accounts. Securities positions and money balances in such ledger accounts (or other records) shall be brought forward periodically but not less frequently than at the end of fiscal quarters. Any portfolio security, the salability of which is conditioned, shall be so noted. A memorandum record shall be available setting forth, with respect to each portfolio security account, the amount and declaration ex-dividend, and payment dates of each dividend declared thereon.
(iii) Separate ledger accounts (or other records) for each person with or through which transactions in portfolio securities are effected, showing each purchase or sale of securities with or through such persons, including details as to the date of the purchase or sale, the quantity and unit and aggregate price of such securities, and the commissions or other compensation paid to such persons. Purchases or sales effected during the same day at the same price may be aggregated.
(iv) Separate ledger accounts (or other records), which may be maintained by a transfer agent or registrar, showing for each shareholder of record of the capital access company the number of shares of capital stock of the company held. In respect of share accumulation accounts (arising from periodic investment plans, dividend reinvestment plans, deposit of issued shares by the owner thereof, etc.), details shall be available as to the dates and number of shares of each accumulation, and except with respect to already issued shares deposited by the owner thereof, prices of each such accumulation.
(3) Corporate charters, certificates of incorporation or trust agreements, and by-laws, and minute books of stockholders' and directors' or trustees' meetings; and minute books of directors' or trustees' committee and advisory board or advisory committee meetings.
(4) A record of each brokerage order given by or in behalf of the capital access company for, or in connection with, the purchase or sale of securities, whether executed or unexecuted. Such record shall include the name of the broker, the terms and conditions of the order and of any modification or cancellation thereof, the time of entry or cancellation, the price at which executed, and the time of receipt of report of execution. The record shall indicate the name of the person who placed the order in behalf of the capital access company.
(5) A record of all other portfolio purchases or sales showing details comparable to those prescribed in paragraph (4) of subsection (b) of this section.
(6) A record of the proof of money balances in all ledger accounts (except shareholder accounts), in the form of trial balances. Such trial balances shall be prepared currently at least once a month.
(7) A record for each fiscal quarter, which shall be completed within ten days after the end of such quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of portfolio securities to named brokers or dealers and the division of brokerage commissions or other compensation on such purchase and sale orders among named persons were made during such quarter. The record shall indicate the consideration given to (i) sales of shares of the capital access company by brokers or dealers, (ii) the supplying of services or benefits by brokers or dealers to the capital access company, its investment adviser or any persons affiliated therewith, and (iii) any other considerations other than the technical qualifications of the brokers and dealers as such. The record shall show the nature of the services or benefits made available, and shall describe in detail the application of any general or specific formula or other determinant used in arriving at such allocation of purchase and sale orders and such division of brokerage commissions or other compensation. The record shall also include the identities of the persons responsible for the determination of such allocation and such division of brokerage commissions or other compensation.
(8) A record in the form of an appropriate memorandum identifying the person or persons, committees, or groups authorizing the purchase or sale of portfolio securities. Where an authorization is made by a committee or group, a record shall be kept of the names of its members who participated in the authorization. There shall be retained as part of the record required by this paragraph any memorandum, recommendation, or instruction supporting or authorizing the purchase or sale of portfolio securities. The requirements of this paragraph are applicable to the extent they are not met by compliance with the requirements of paragraph (b)(4) of this section.
(9) Files of all advisory material received from the investment adviser, any advisory board or advisory committee, or any other persons from whom the capital access company accepts investment advice, other than material which is furnished solely through uniform publications distributed generally.
(10) Files of all investor suitability statements. Such files shall include the individual's name, telephone number, and the basis for establishing the suitability of the investor as an “accredited investor.”
(11) A record of all complaints received from investors. There shall be retained as part of the record required by this paragraph a description of the nature of the complaint and the final disposition and resolution of the complaint.
(12) Files containing due diligence documentation of the small business firms that the capital access company invests in, including but not limited to the following:
(a) copies of each issuer's prospectus, if one was prepared;
(b) copies of each issuer's offering circular, if one was prepared;
(c) copies of each issuer's most recent annual report;
(d) copies of each issuer's most recent balance sheet and profit and loss and retained earnings statements; and
(e) copies of written records of any other material information that comes to the knowledge or possession of the capital access company before the investment is made.
(13) The term “other records” as used in the expressions “journals (or other records of original entry)” and “ledger accounts (or other records)” shall be construed to include, where appropriate, copies of voucher checks, confirmations, or similar documents which reflect the information required by the applicable rule or rules in appropriate sequence and in permanent form, including similar records developed by the use of automatic data processing systems.
Note: Authority cited: Sections 28500 and 28951, Corporations Code. Reference: Section 28500, Corporations Code.
HISTORY
1. New article 11 (sections 280.650-280.653) and section filed 6-24-99; operative 7-1-99 pursuant to Government Code section 11343.4(d) (Register 99, No. 26).
This database is current through 7/22/22 Register 2022, No. 29
10 CCR § 280.650, 10 CA ADC § 280.650
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