OAR 441-195-0040: Books and Records to Be Maintained by Investment Advisers

(1) Every investment adviser shall make and keep true, accurate, and current the following books and records relating to his investment advisory business: (a) A journal or journals, including cash receipts and disbursements records, and any other records of original entry forming the basis of entries in any ledger; (b) General and auxiliary ledgers (or other comparable records) reflecting asset, liability, reserve, capital, income and expense accounts; (c) A memorandum of each order given by the investment adviser for the purchase or sale of any security, of any instruction received by the investment adviser from a client concerning the purchase, sale, receipt or delivery of a particular security and of any modification or cancellation of any such order or instruction. Such memoranda shall show the terms and conditions of the order, instruction, modification or cancellation; shall identify the person connected with the investment adviser who recommended the transaction to the client and the person who placed such order; and shall show the account for which entered, the date of entry and the bank or broker-dealer by or through whom executed where appropriate. Orders entered pursuant to the exercise of discretionary power shall be so designated; (d) All checkbooks, bank statements, canceled checks and cash reconciliations of the investment adviser; (e) All bills or statements (or copies thereof) paid or unpaid, relating to the business of the investment adviser as such; (f) All trial balances, financial statements and internal audit working papers relating to the business of such investment adviser; (g) Originals of all written communications received and copies of all written communications sent by such investment adviser relating to: (A) Any recommendation made or proposed to be made and any advice given or proposed to be given; (B) Any receipt, disbursement or delivery of funds or securities; or (C) The placing or execution of any order to purchase or sell any security; provided, however, that the investment adviser shall not be required to keep any unsolicited market letters and other similar communications of general public distribution not prepared by or for the investment adviser; and provided that, if the investment adviser sends any notice, circular or other advertisement offering any report, analysis, publication, or other investment advisory service to more than ten persons, the investment adviser shall not be required to keep a record of the names and addresses of the persons to whom it was sent, except that if such notice, circular or advertisement is distributed to persons named on any list, the investment adviser shall retain with the copy of such notice, circular or advertisement a memorandum describing the list and the source thereof; (h) A list or other record of all accounts in which the investment adviser is vested with any discretionary power with respect to the funds, securities, or transactions of any client; (i) All powers of attorney and other evidences of the granting of any discretionary authority by any client to the investment adviser, or copies thereof; (j) All written agreements (or copies thereof) entered into by the investment adviser with any client or otherwise relating to the business of such investment adviser as such; (k) A copy of each notice, circular, advertisement, newspaper article, investment letter, bulletin, or other communication recommending the purchase or sale of a specific security which the investment adviser circulates or distributes, directly or indirectly, to ten or more persons (other than investment supervisory clients or persons connected with such investment adviser), and if such notice, circular, advertisement, newspaper articles, investment letter, bulletin, or other communication does not state the reasons for such recommendation, a memorandum of the investment adviser indicating the reasons therefor. (2) If an investment adviser has custody or possession of securities or funds of any client, the records required to be made and kept under section (1) of this rule shall include: (a) A journal or other record showing all purchases, sales, receipts, and deliveries of securities (including certificate numbers) for such accounts and all other debits and credits to such accounts; (b) A separate ledger account for each such client showing all purchases, sales receipts and deliveries of securities, the date and price of each such purchase or sale and all debits and credits; (c) Copies of confirmations of all transactions effected by or for the account of any such client; (d) A record for each security in which any such client has a position, which record shall show the name of each such client having any interest in such security, the amount of the interest of each such client and the location of each such security. (3) Every investment adviser who renders any investment supervisory or management service to any client shall, with respect to the portfolio being supervised or managed and to the extent that the information is reasonably available to or obtainable by the investment adviser, make and keep true, accurate and current: (a) Records showing separately for each such client the securities purchased and sold and the date, amount and price of each such purchase or sale; (b) For each security in which any such client has a current position, information from which the investment adviser can promptly furnish the name of each such client and the current amount of the interest of such client. (4) Any books or records required by this section may be maintained by the investment adviser in such manner that the identity of any client to whom such investment adviser renders investment supervisory services is indicated by numerical or alphabetical code or some similar designation. (5)(a) All books and records required to be made under the provisions of section (1) to subsection (3)(a) of this rule, inclusive, of this rule shall be maintained and preserved in an easily accessible place for a period of not less than six years from the end of the fiscal year during which the last entry was made on such record. The records for the most recent two years shall be kept in an appropriate office of the investment adviser; (b) Charter documents, minute books and stock certificate books of the investment adviser and of any predecessor shall be maintained in the principal office of the investment adviser and preserved until at least three years after termination of the enterprise. (6) An investment adviser, before ceasing to conduct or discontinue business as an investment adviser, shall arrange for and be responsible for the preservation of the books and records required to be maintained and preserved under this rule for the remainder of the period specified in this rule. (7) The records required to be maintained and preserved pursuant to this rule may be immediately produced or reproduced on microfilm and may be maintained and preserved for the required time in that form. If such microfilm substitution for hard copy is made by an investment adviser, he shall: (a) At all times have available for examination of his records facilities for immediate, easily readable projection of the microfilm and for producing easily readable facsimile enlargements; (b) Arrange the records and index and file the films in such a manner as to permit the immediate location of any particular records; (c) Be ready at all times to provide, and immediately provide, any facsimile enlargement which may be requested; and (d) Store separately from the original one other copy of the microfilm for the time required. (8)(a) Any book or other record made, kept, maintained and preserved in compliance with OAR 441-195-0020 and 441-195-0030, which is substantially the same as the book or other record required to be made, kept, maintained and preserved under this rule, shall satisfy the requirements of this rule; (b) A record made and kept pursuant to any provision of section (1) of this rule, which contains all the information required under any other provision of section (1) need not be maintained in duplicate in order to meet the requirements of the other provisions of section (1) of the rule. (9) As used in this rule, the terms “Power of Attorney” and “Discretionary Authority” do not include discretion as to the price at which or the time when a transaction is or is to be effected, if, before the order is given by the investment adviser, the client has directed or approved the purchase or sale of a definite amount of the particular security.