reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.216.15 - Bond Requirement

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Any issuer who employs agents in connection with any security or transaction
				  not exempt by Chapter 1 (commencing with Section
				  25100) of Part 2 of Division 1 of
				  Title 4 of the Code shall furnish and maintain, so long as such issuer is
				  engaging in sales of securities requiring the posting of such bond, a surety
				  bond in the amount of $10,000 issued by a corporate surety admitted to transact
				  business in the State of California, in the form and tenor required pursuant to
				  subdivision (e) of Section
				  25216 of the Code, unless such
				  issuer complies with subdivision (b) hereof.
(b) An appropriate deposit of cash or
				  securities is acceptable by the Commissioner in lieu of the bonds mentioned in
				  subsection (a).
The following procedure should be observed by the person
					 making such deposit ("depositor"):
(1)
				  Appropriate deposits of cash or securities include certificates of deposit or
				  other appropriate evidence of deposit of bank accounts or savings and loan
				  certificates or share accounts. Securities which have a fluctuating market
				  value will not be deemed appropriate within the meaning of subdivision (e) of
				  Section 25216 of the Code.
(2) The depositor forwards the cash or
				  securities to a bank of its choice in the City of Sacramento, with the request
				  that the same be held subject to written instructions of the Commissioner of
				  Corporations or State Treasurer.
(3) Concurrently, the depositor files with
				  the Commissioner six copies of an Assignment Form furnished by the Commissioner
				  completed as to Part I and Part II, together with two copies of instruction
				  letter to the Sacramento bank. If the depositor is a corporation, it shall also
				  file two copies of the resolution of its board of directors authorizing the
				  filing of the Assignment.
(4) Upon
				  acceptance of the deposit, the Commissioner will complete Part III of the
				  Assignment Form. One copy each of the completed form will be forwarded to the
				  depositor or issuer, and the bank or savings and loan association where the
				  funds are deposited.
(5) The
				  arrangement may be terminated by filing a bond as specified in subsection (a)
				  of this section, upon expiration or termination of the qualification, or
				  otherwise as ordered by the Commissioner. However, the deposit in lieu of bond
				  is not returnable to the depositor until two years after termination of the
				  arrangement.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.216.16 - Dual Employment or Affiliation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
It shall constitute a "fraudulent, deceptive or
					 manipulative act or practice," as used in subsection (b) of Section
					 25216 of the Code, for any agent,
					 officer, director, partner, managing employee or controlling person of a
					 broker-dealer to become concurrently associated with another broker-dealer or
					 with an issuer as an agent, officer, director, partner, managing employee or
					 controlling person unless prior to establishing such concurrent affiliation (i)
					 such person gives written notice to both affiliates regarding such dual
					 relationship, (ii) both affiliates consent to such concurrent affiliation,
					 (iii) both affiliates establish appropriate procedures designed to correct any
					 conflict of interest arising out of such relationship and to guard against
					 violations of Sections
					 260.216,
					 260.216.3,
					 260.216.4,
					 260.216.7 or
					 260.218.4 of these rules or Rules
					 15c1-2 (17 CFR
					 240.15 c1-2), 15c1-5 (17 CFR
					 240.15c1-5), 15c1-6
					 (17 CFR
					 240.15c1-6),or 15c1-8
					 (17 CFR
					 240.15 c1-8), under the Securities Exchange
					 Act of 1934 (15 USC
					 78a et seq.) and (iv) if both affiliates are
					 broker-dealers and employ the same person as an agent (as defined in Section
					 25003 of the Code), both
					 affiliates agree to be liable to customers of either affiliate for all acts of
					 the agent in the employment of either affiliate. For the purposes of this
					 section, "controlling person" means any person owning or controlling 10% or
					 more of the voting securities of a broker-dealer or the parent of a
					 broker-dealer and any partner of a broker-dealer.
1. New
					 section filed 9-19-73; effective thirtieth day thereafter (Register 73, No.
					 38).
2. Amendment filed 4-27-84; effective thirtieth day thereafter
					 (Register 84, No. 18).
3. Amendment filed 1-7-88; operative 2-6-88
					 (Register 88, No. 4).
Note: Authority cited: Sections
						25216(b)
						and
						25610,
						Corporations Code. Reference: Section
						25216,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.217 - Qualifications of Broker-Dealers, Compliance Supervisors and Reported Agents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Every
				  individual who is a broker-dealer, or a compliance supervisor or reported agent
				  of a broker-dealer:
(1) shall have passed,
				  within two years prior to the date of filing the application for, or the
				  issuance of, a broker-dealer license, or becoming a compliance supervisor or
				  reported agent of a licensed broker-dealer, the Series 63/Uniform Securities
				  Agent State Law Examination ("Series 63 Examination") or the Series 66/Uniform
				  Combined State Law Examination ("Series 66 Examination"), both of which are
				  administered by the Financial Industry Regulatory Authority; and
(2) shall meet all applicable examination
				  requirements of the Securities and Exchange Commission and the self-regulatory
				  organizations of which the broker-dealer is a member.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.217.1 - Qualifications of Agents. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48). For prior history, see Register 69,
					 No. 20.
2. Editorial correction filed 11-9-82 (Register 82, No.
					 46).
3. Repealer filed 4-23-90; operative 5-23-90 (Register 90, No.
					 20).
Note: Authority cited: Sections
						25217(a)
						and
						25610,
						Corporations Code. Reference: Section
						25217,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218 - Just and Equitable Principles of Trade

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Each broker-dealer and each agent employed by such a
					 broker-dealer shall observe high standards of commercial honor and just and
					 equitable principles of trade in the conduct of such person's
					 business.
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
2. Editorial correction
					 filed 11-9-82 (Register 82, No. 46).
Note: Authority cited: Sections
						25218
						and
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.1 - Mark-Ups and Mark-Downs

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No broker-dealer and no agent employed by such a
					 broker-dealer shall enter into any transaction with a customer in any security
					 at a price not reasonably related to the current market price of the security,
					 or charge a commission which is not reasonable.
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
2. Editorial correction
					 of NOTE filed 4-6-83 (Register 83, No. 15).
Note: Authority cited: Sections
						25218
						and
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.2 - Suitability of Recommendations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Any broker-dealer and any agent employed by such a
					 broker-dealer who recommends to a customer the purchase, sale or exchange of
					 any security shall have reasonable grounds to believe that the recommendation
					 is not unsuitable for such customer on the basis of information furnished by
					 such customer after reasonable inquiry concerning the customer's investment
					 objectives, financial situation and needs, and any other information known by
					 such broker-dealer or agent.
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
2. Editorial correction
					 of NOTE filed 4-6-83 (Register 83, No. 15).
Note: Authority cited: Sections
						25218
						and
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.3 - Free-Riding and Withholding

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No broker-dealer who is participating in a distribution of
					 securities, whether acquired as an underwriter, a selling group member, or from
					 a member participating in the distribution as an underwriter or selling group
					 member, shall fail to make a bona fide public offering of all of the securities
					 allotted to such person for distribution.
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
2. Editorial correction
					 filed 11-9-82 (Register 82, No. 46).
Note: Authority cited: Sections
						25218
						and
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.4 - Supervision of Agents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Every broker-dealer shall exercise diligent supervision over the securities
				  activities of all of its agents.
(b) Every agent employed by a broker-dealer
				  shall be subject to the supervision of a supervisor designated by such
				  broker-dealer. The supervisor may be the broker-dealer in the case of a sole
				  proprietor, or a partner, officer, office manager, or any qualified
				  agent.
(c) As part of the
				  responsibility under this rule, every broker-dealer shall establish, maintain
				  and enforce written procedures, a copy of which shall be kept in each business
				  office, which shall set forth the procedures adopted by the broker-dealer to
				  comply with the following duties imposed by this section, and shall state at
				  which business office or offices the broker-dealer keeps and maintains the
				  records required by Section
				  260.218.5 of these rules.
(1) The review and written approval by the
				  designated supervisor of the opening of each new customer account;
(2) The frequent examination of all customer
				  accounts to detect and prevent irregularities or abuses;
(3) The prompt review and written approval by
				  the designated supervisor of all securities transactions by agents and all
				  correspondence pertaining to the solicitation or execution of all securities
				  transactions by agents;
(4) The
				  review and written approval by the designated supervisor of the delegation by
				  any customer of discretionary authority with respect to the account to the
				  broker-dealer or to a stated agent or agents of the broker-dealer and the
				  prompt written approval of each discretionary order entered on behalf of that
				  account; and
(5) The prompt review
				  and written approval of the handling of all customer
				  complaints.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.5 - Record Keeping. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
2. Editorial correction
					 filed 11-9-82 (Register 82, No. 46).
3. Repealer filed 3-6-2008;
					 operative 4-5-2008 (Register 2008, No. 10).
Note: Authority cited: Sections
						25218
						and
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.218.6 - Discretionary Authority

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No broker-dealer and no agent employed by such
					 broker-dealer shall exercise any discretionary power or authority for any
					 customer unless such customer has given prior written authorization to exercise
					 such power or authority to a stated individual who is a broker-dealer or agent,
					 and has indicated the reasons for such authorization. This Section does not
					 apply to transactions in which the broker-dealer's discretion is limited to the
					 price at which or the time when an order given by a customer for the purchase
					 or sale of a definite amount of a specified security shall be
					 executed.
1. Amendment
					 filed 11-29-79 as an emergency; designated effective 1-1-80. Certificate of
					 Compliance included (Register 79, No. 48).
Note: Authority cited: Section
						25610,
						Corporations Code. Reference: Section
						25218,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.230 - Electronic Filings

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Designation: The Commissioner designates the web-based Investment Adviser
				  Registration Depository ("IARD") operated by the Financial Industry Regulatory
				  Authority to receive and store filings and collect related fees from investment
				  advisers and investment adviser representatives on behalf of the
				  Commissioner.
(b) Use of IARD: All
				  investment adviser and investment adviser representative applications,
				  amendments, reports, notices, related filings and fees required to be filed
				  with the Commissioner pursuant to the rules promulgated under the Code shall be
				  filed electronically with and transmitted to IARD, except as otherwise
				  indicated in these rules. The following conditions relate to such electronic
				  filings:
(1) Electronic Signature: When a
				  signature or signatures are required by the particular instructions of any
				  filing to be made through IARD, a duly authorized officer of the applicant or
				  the applicant him or herself, as required, shall affix his or her electronic
				  signature to the filing by typing his or her name in the appropriate fields and
				  submitting the filing to IARD. Submission of a filing in this manner shall
				  constitute irrefutable evidence of legal signature by any individuals whose
				  names are typed on the filing.
(2)
				  When filed: Solely for purposes of a filing made through IARD, unless otherwise
				  specified, a document is considered filed with the Commissioner when all fees
				  are received and the filing is accepted by IARD on behalf of the
				  state.
(3) Any documents required
				  to be filed with the Commissioner that are not permitted to be filed with or
				  cannot be accepted by IARD shall be filed in paper directly with the
				  Commissioner.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.231 - Application for Investment Adviser Certificate

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The application for a certificate as an investment adviser
					 and all amendments thereto shall be filed as follows:
(a) Initial Application: The application for
				  a certificate as an investment adviser pursuant to Section
				  25231 of the Code shall be made by
				  completing Form ADV in accordance with the form instructions and by filing the
				  form with IARD for transmission to the Commissioner. The Commissioner may
				  require additional documentation as deemed appropriate as prescribed in
				  subsection (a)(4) of this rule.
(1) Part 2 of
				  Form ADV shall be filed directly with the Commissioner until the form can be
				  filed with IARD.
(2) An applicant
				  shall complete a Customer Authorization of Disclosure of Financial Records, as
				  set forth in subsection (i), and maintain the form in the applicant's books and
				  records as provided in Section
				  25241 of the Code and Section
				  260.241.3 of these rules. The
				  applicant shall provide the form to the Commissioner upon request.
(3) The applicant shall file directly with
				  the Commissioner, a Statement of Financial Condition with worksheet that
				  demonstrates compliance with the minimum financial requirements as prescribed
				  in Section
				  260.237.2, investment advisory
				  contract(s), proof of compliance with the qualification requirements prescribed
				  in Section
				  260.236, and the federal taxpayer
				  identification number as provided in subdivision (j) of this section, if the
				  applicant is a business entity other than a sole proprietorship.
(4) The Commissioner may request additional
				  information, documentation or detail pertaining to Form ADV to be filed
				  directly with the Commissioner.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.231.1 - Special Instruction Sheet. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 7-18-79; effective thirtieth day thereafter (Register 79, No.
					 29).
2. Amendment filed 4-27-84; effective thirtieth day thereafter
					 (Register 84, No. 18).
3. Repealer filed 12-19-85 as an emergency;
					 designated effective 1-1-86 (Register 85, No. 51). A Certificate of Compliance
					 must be transmitted to OAL within 120 days or emergency language will be
					 repealed on 5-1-86.
4. Certificate of Compliance transmitted to OAL
					 4-10-86 and filed 5-8-86 (Register 86, No. 19).
Note: Authority cited: Sections
						25231
						and
						25610,
						Corporations Code. Reference: Sections
						25230,
						25231,
						25241,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.231.2 - Application for Investment Adviser Certificate Not Filing Through the Investment Adviser Registration Depository. [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. New
					 section filed 3-4-2003; operative 4-3-2003 (Register 2003, No.
					 10).
2. Repealer filed 3-6-2007; operative 4-5-2007 (Register 2007,
					 No. 10).
Note: Authority cited: Sections
						25231
						and
						25610,
						Corporations Code. Reference: 25230, 25231, 25234, 25236, 25237, 25241, 25608
						and 25613, Corporations Code; and Sections
						7470,
						7473,
						7490 and
						13140-
						13144,
						Government Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.231.3 - Representation of Eligibility by Investment Adviser

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The filing of an application, renewal, or
				  notice with the Investment Adviser Registration Depository ("IARD") or directly
				  with the Commissioner shall constitute a representation by the applicant or
				  investment adviser that the applicant or investment adviser is not ineligible
				  to receive a certificate under Section
				  250.60 of these rules.
(b) An applicant subject to Section
				  250.60 of these rules who files an
				  application through IARD or directly with the Commissioner may, in lieu of
				  filing the form in Section
				  250.61 of these rules, complete
				  the form and maintain the form and supporting documentation in the applicant's
				  books and records as provided in Section
				  25241 of the Code and Section
				  260.241.3 of these rules, if the
				  investment adviser agrees to provide the form and supporting documentation to
				  the Commissioner upon request.
1. New
					 section filed 3-4-2003; operative 4-3-2003 (Register 2003, No.
					 10).
Note: Authority cited: Sections
						25241
						and
						25610,
						Corporations Code. Reference: Sections
						25231
						and
						25241,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.234 - Compensation Based on Capital Gains

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The provisions of Section
					 25234 (a)(1) of
					 the Code shall not apply:
(a) to any
				  investment adviser registered under the Investment Advisers Act of 1940;
				  or
(b) to any investment adviser,
				  provided all of the following are met:
(1) the
				  only clients entering into the investment advisory contract are "qualified
				  clients" as defined in paragraph (d) of Rule 205-3 (17 CFR
				  275.205-3(d)) under the
				  Investment Advisers Act of 1940 (Section
				  80 b-1 et seq.),
(2) the condition in paragraph (b) of Rule
				  205-3 (17 CFR
				  275.205-3(b)) is satisfied
				  (for purposes of this subsection (b), the definition in paragraph (d) of Rule
				  205-3 shall apply), and
(3) full
				  disclosure of all material information regarding the proposed compensation
				  arrangement is provided to each qualified client prior to entering into the
				  contract; or
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.235 - Advertisements by Investment Advisers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) It shall constitute a fraudulent,
				  deceptive, or manipulative act, practice or course of business, within the
				  meaning of Section
				  25235 of the Code, for an
				  investment adviser, directly or indirectly, to publish, circulate or distribute
				  any advertisement:
(1) which refers, directly
				  or indirectly, to any testimonial of any kind concerning the investment adviser
				  or concerning any advice, analysis, report or other service rendered by such
				  investment adviser; or
(2) which
				  refers, directly or indirectly, to past specific recommendations of such
				  investment adviser which were or would have been profitable to any person;
				  provided, however, that this Clause (2) does not prohibit an advertisement
				  which sets out or offers to furnish a list of all recommendations made by such
				  investment adviser within the immediately preceding period of not less than one
				  year if such advertisement, and such list if it is furnished separately:
(i) state the name of each such security
				  recommended, the date and nature of each such recommendation (e.g., whether to
				  buy, sell or hold), the market price at that time, the price at which the
				  recommendation was to be acted upon, and the market price of each such security
				  as of the most recent practicable date, and
(ii) contain the following cautionary legend
				  on the first page thereof in print or type as large as the largest print or
				  type used in the body or text thereof: "It should not be assumed that
				  recommendations made in the future will be profitable or will equal the
				  performance of the securities in this list."; or
(3) which represents, directly or indirectly,
				  that any graph, chart, formula or other device being offered can in and of
				  itself be used to determine which securities to buy or sell, or when to buy or
				  sell them; or which represents, directly or indirectly, that any graph, chart,
				  formula or other device being offered will assist any person in making his/her
				  own decisions as to which securities to buy or sell, or when to buy or sell
				  them, without prominently disclosing in such advertisement the limitations
				  thereof and the difficulties with respect to its use; or
(4) which contains any statement to the
				  effect that any report, analysis, or other service will be furnished free or
				  without charge, unless such report, analysis or other service actually is or
				  will be furnished entirely free and without any condition or obligation,
				  directly or indirectly; or
(5)
				  which contains any untrue statement of a material fact, or which is otherwise
				  false or misleading.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.235.1 - Licensed Broker-Dealers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An investment adviser who is a licensed
				  broker-dealer is not subject to the provisions of subdivision (c) of Section
				  25235 of the Code in connection
				  with any transaction in relation to which such broker-dealer is acting as an
				  investment adviser solely (1) by means of publicly distributed written
				  materials or publicly made oral statements or (2) through the issuance of
				  responses to specific requests for statistical information where such responses
				  involve no expressions of opinion or estimates by such investment adviser as to
				  the investment merits of a particular security; provided, however, that such
				  materials and oral statements include a statement that if the purchaser of the
				  advisory communication uses the services of the adviser in connection with a
				  sale or purchase of a security which is a subject of such communication, the
				  adviser may act as principal for its own account or as agent for another
				  person.
For the purpose of this rule, publicly distributed written
					 materials are those which are distributed to 35 or more persons who pay for
					 such materials, and publicly made oral statements are those made simultaneously
					 to 35 or more persons who pay for access to such statements.
(b) The requirement that the investment
				  adviser disclose that it may act as principal or agent for another person in
				  the sale or purchase of a security that is the subject of investment advice
				  does not relieve the investment adviser of any disclosure obligation which may
				  be imposed by subdivision (a) or (b) of Section
				  25235 of the Code or by other
				  provisions of the Corporate Securities Law of 1968.
1. New
					 section filed 5-29-75 as an emergency; effective upon filing (Register 75, No.
					 22).
2. Certificate of Compliance filed 9-24-75 (Register 75, No.
					 39).
3. Editorial correction of NOTE filed 4-6-83 (Register 83, No.
					 15).
Note: Authority cited: Sections
						25205
						and
						25610,
						Corporations Code. Reference: Sections
						25205
						and
						25235,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.235.2 - Disclosure of Compensation for Financial Planning Activities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) It shall
				  constitute a fraudulent, deceptive, or manipulative act, practice or course of
				  business within the meaning of Section
				  25235 of the Code for an
				  investment adviser or an associated person of an investment adviser to fail to
				  deliver to a financial planning client a notice in writing containing at least
				  the information found below at the time of entering into a contract for, or
				  otherwise arranging for the provision of, the delivery of a financial plan:
(1) Whether the investment adviser, or an
				  affiliate or associated person of the investment adviser, will receive
				  commissions from the sale of insurance or real estate or will receive fees or
				  other compensation from the sale of securities or other products or services
				  recommended in the financial plan or otherwise has a conflict of interest. If
				  so, that a conflict exists between the interests of the investment adviser or
				  associated person and the interests of the client. This requirement does not
				  apply to an investment adviser or an associated person of the investment
				  adviser if the investment adviser, an associated person of the investment
				  adviser, and an affiliate of the investment adviser will not receive fees or
				  other compensation from the sale of securities or other products or services
				  recommended in the financial plan, and if such persons otherwise do not have a
				  conflict of interest.
(2) The
				  client is under no obligation to act on the investment adviser's or associated
				  person's recommendation. Moreover, if the client elects to act on any of the
				  recommendations, the client is under no obligation to effect the transaction
				  through the investment adviser or the associated person when such person is
				  employed as an agent with a licensed broker-dealer or is licensed as a
				  broker-dealer or through any associate or affiliate of such
				  person.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.235.4 - Financial and Disciplinary Information Disclosures by Investment Advisers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) It shall
				  constitute a fraudulent, deceptive, or manipulative act, practice or course of
				  business within the meaning of Section
				  25235 of the Code for any
				  investment adviser to fail to disclose to any client or prospective client all
				  material facts with respect to:
(1) A
				  financial condition of the adviser that is reasonably likely to impair the
				  ability of the adviser to meet contractual commitments to clients if (A) the
				  adviser has discretionary authority (express or implied) or custody over such
				  client's funds or securities, or (B) requires prepayment of advisory fees from
				  such client 6 months or more in advance; or
(2) A legal or disciplinary event that is
				  material to an evaluation of the adviser's integrity or ability to meet
				  contractual commitments to clients.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.236 - Qualifications of Investment Advisers and Investment Adviser Representatives

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
References to an investment adviser representative shall
					 mean both an investment adviser representative and an associated person of an
					 investment adviser, as those terms are defined in Section
					 25009.5(a) and
					 (b) of the Code.
(a) Qualification Requirements. An investment
				  adviser and each investment adviser representative shall pass, within two years
				  prior to the date of filing the application for an investment adviser
				  certificate or becoming engaged as an investment adviser representative:
(1) the Series 65/Uniform Investment Adviser
				  Law Examination in effect on January 1, 2000 ("2000 Series 65 Examination"),
				  or
(2) the Series 7/General
				  Securities Representative Examination ("Series 7 Examination) and the Series
				  66/Uniform Combined State Law Examination ("2000 Series 66
				  Examination").
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.236.1 - Reporting Requirements for Investment Adviser Representatives

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The procedures
				  set forth in this subsection are applicable to investment advisers licensed
				  pursuant to Section
				  25230 of the Code. References to
				  an investment adviser representative shall mean both an investment adviser
				  representative and an associated person of an investment adviser, as those
				  terms are defined in Section
				  25009.5(a) of the
				  Code.
(1) Upon employment of an individual as
				  an investment adviser representative, the investment adviser shall:
(A) Obtain a properly executed application
				  for registration, Form U4,
(B)
				  Obtain for its records evidence that such investment adviser representative
				  meets the qualification requirements of Section
				  260.236 of these rules,
				  and
(C) Have the responsibility and
				  duty to ascertain by reasonable investigation the good character, business
				  reputation, qualifications, and experience of an individual upon employment or
				  engagement as an investment adviser representative. Where an individual has
				  previously been reported to the Central Registration Depository ("CRD"), the
				  investment adviser shall obtain and review a copy of Form U5 filed with CRD by
				  such individual's most recent previous employer, together with any amendments
				  thereto.
The investment adviser shall conduct the investigation
					 required by this section no later than thirty (30) days following the filing of
					 Form U4 with CRD, or demonstrate that it has made a reasonable effort to comply
					 with this section. Upon completion of the investigation, the investment adviser
					 shall take whatever action is deemed appropriate in accordance with sound
					 business practice and the protection of investors.
Evidence of compliance with Section
					 260.236 and investigation of the
					 investment adviser representative shall be maintained as a part of the records
					 of the investment adviser as required by Section
					 260.241.3 of these
					 rules.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.236.2 - Investment Adviser Representative Continuing Education

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Definitions. As used in this rule, the following terms mean:
(1) "Approved IAR Continuing Education
				  Course" means a course approved by NASAA at the time the IAR takes the course
				  and that is approved in accordance with the process set forth on pages 20
				  through 27 of the NASAA IAR CE Program Handbook, January 2023 Edition, herein
				  incorporated by reference with the following clarifications:
A. On page 21 of the NASAA IAR CE Program
				  Handbook, January 2023 Edition, the terms "audience," "behavior," "condition,"
				  and "degree" constitute elements that NASAA shall consider in determining
				  whether a course has a defined objective and outcome, and have the following
				  meanings:
i. "Audience" means the course
				  identifies the intended recipients of the course material.
ii. "Behavior" means the course identifies
				  the knowledge or skills that a student obtains at the completion of the
				  course.
iii. "Condition" means the
				  course identifies the conditions under which a student demonstrates knowledge
				  or skills at the end of the course.
iv. "Degree" means the course includes
				  measurable standards to assess a student's performance.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.237.1 - Alternative Minimum Financial Requirements (Until 1/1/05). [Repealed]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. Amendment
					 of subsection (a) filed 12-31-75 as an emergency; designated effective 1-1-76.
					 Certificate of Compliance included (Register 76, No. 1).
2.
					 Amendment filed 4-27-84; effective thirtieth day thereafter (Register 84, No.
					 18).
3. Amendment of section heading and subsections (a) and (c)
					 filed 1-7-88, operative 2-6-88 (Register 88, No. 4).
4. Amendment of
					 section heading and new first paragraph filed 3-4-2003; operative 4-3-2003
					 (Register 2003, No. 10).
5. Repealer filed 9-24-2009; operative
					 10-24-2009 (Register 2009, No. 39).
Note: Authority cited: Sections
						25237
						and
						25610,
						Corporations Code. Reference: Section
						25237,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 10 - Licensing and Regulation of Investment Advisers › Section 260.237.2 - Minimum Financial Requirements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(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.
(b) Every investment
				  adviser who accepts prepayment of more than $500 per client and six or more
				  months in advance shall maintain at all times a positive net worth.
(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:
(1) A trial balance of all ledger
				  accounts;
(2) A statement of all
				  client funds or securities which are not segregated;
(3) A computation of the aggregate amount of
				  client ledger debit balances; and
(4) A statement as to the number of client
				  accounts.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 11 - General Provisions Relating to Agents, Broker-Dealers and Investment Advisers › Section 260.240 - Consent to Service of Process

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An investment adviser's electronic
				  signature on the Execution Page of Form ADV (Uniform Application for Investment
				  Adviser Registration (17 CFR
				  279.1), filed with the Investment Adviser
				  Registration Depository ("IARD"), shall constitute the consent to service of
				  process required under Section
				  25240 of the Code. If an
				  investment adviser has not filed Form ADV with IARD, then the consent to
				  service of process required by Section
				  25240 of the Code shall be the
				  investment adviser's written signature on the Execution Page of Form ADV filed
				  with the Commissioner.
(b) A
				  broker-dealer's electronic signature on the Execution Page of Form BD (Uniform
				  Application for Broker-Dealer Registration (17 CFR
				  249.501) in the Central Registration
				  Depository ("CRD") shall constitute the consent to service of process required
				  under Section
				  25240 of the Code. If the
				  broker-dealer does not file its Form BD with CRD, then the consent to service
				  of process required by Section
				  25240 of the Code shall be the
				  broker-dealer's written signature on the Execution Page of Form BD filed with
				  the Commissioner.
1. Editorial
					 correction adding NOTE filed 4-6-83 (Register 83, No. 15).
2.
					 Repealer and new section and amendment of NOTE filed 3-4-2003; operative
					 4-3-2003 (Register 2003, No. 10).
3. Amendment of section and NOTE
					 filed 9-24-2009; operative 10-24-2009 (Register 2009, No.
					 39).
Note: Authority cited: Sections
						25240,
						25610
						and
						25612.5,
						Corporations Code. Reference: Section
						1633.7, Civil
						Code; and Sections
						25211,
						25231,
						25240,
						25612.3
						and
						25612.5,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 11 - General Provisions Relating to Agents, Broker-Dealers and Investment Advisers › Section 260.241 - Books and Records of Broker-Dealers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Unless otherwise provided by order of the
				  Commissioner, every broker-dealer shall make, maintain, and preserve books and
				  records in compliance with U.S. Securities and Exchange Commission rules
				  15c2-11 (17 CFR
				  240.15c2-11), 15g-2(c)
				  (17 CFR
				  240.15g-2(c)), 15g-4(b)(2)
				  (17 CFR
				  240.15g-4(b)(2)),
				  15g-5(b)(2) (17 CFR
				  240.15g-5(b)(2)),
				  15g-6(f) (17 CFR
				  240.15g-6(f)), 17a-3
				  (17 CFR
				  240.17a-3), and 17a-4 (17 CFR
				  240.17a-4), all of which are incorporated by
				  reference.
(b) For purposes of the
				  application of the above-referenced U.S. Securities and Exchange Commission
				  rules, "member" shall also mean "broker-dealer" as defined in Corporations Code
				  Section
				  25004,
				  "associated person" shall also mean "agent" as defined in Corporations Code
				  Section
				  25003,
				  and "securities regulatory authority" shall also mean the Department of
				  Business Oversight.
1. Amendment
					 of subsections (a) (11) and (b) 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 of subsections
					 (a)(11) and (a)(12)(viii) filed 9-2-77; effective thirtieth day thereafter
					 (Register 77, No. 36).
3. Amendment of subsection (b) filed 6-2-78;
					 effective thirtieth day thereafter (Register 78, No. 22).
4.
					 Amendment filed 4-27-84; effective thirtieth day thereafter (Register 84, No.
					 18).
5. Amendment of subsection (a), repealer of subsections
					 (a)(12)-(a)(12)(ix), and new subsections (a)(12)-(14) filed 6-1-98; operative
					 6-1-98 pursuant to Government Code section
					 11343.4(d)
					 (Register 98, No. 23).
6. Amendment of subsections (a), (a)(12),
					 (b)(1) and (b)(2) filed 1-23-2001; operative 1-23-2001 pursuant to Government
					 Code section
					 11343.4(c)
					 (Register 2001, No. 4).
7. Repealer and new section filed 3-6-2008;
					 operative 4-5-2008 (Register 2008, No. 10).
8. Change without
					 regulatory effect amending subsection (b) filed 8-13-2014 pursuant to section
					 100, title 1, California Code of
					 Regulations (Register 2014, No. 33).
Note: Authority cited: Sections
						25241
						and
						25610,
						Corporations Code. Reference: Section
						25241,
						Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 11 - General Provisions Relating to Agents, Broker-Dealers and Investment Advisers › Section 260.241.1 - Preservation of Records. [Repealed.]

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
1. Amendment
					 of subsection (f) filed 7-13-70; effective thirtieth day thereafter (Register
					 70, No. 29).
2. New subsection (b)(8) filed 9-2-77; effective
					 thirtieth day thereafter (Register 77, No. 36).
3. New subsections
					 (b)(9) and (h) filed 6-2-78; effective thirtieth day thereafter (Register 78,
					 No. 22).
4. Amendment filed 4-27-84; effective thirtieth day
					 thereafter (Register 84, No. 18).
5. Amendment of subsection (f)
					 filed 1-7-88; operative 2-6-88 (Register 88, No. 4).
6. Repealer
					 filed 3-6-2008; operative 4-5-2008 (Register 2008, No.
					 10).
Note: Authority cited: Sections
						25241
						and
						25610,
						Corporations Code. Reference: Section
						25241,
						Corporations Code.