RIA Books and Records Requirement: Financial Statements | COMPLY (2024)

FAQs

RIA Books and Records Requirement: Financial Statements | COMPLY? ›

Registered investment adviser ("RIA") firms of every size are required to keep true, accurate, and current books and records related to financials. This is a requirement of both firms who are registered with the Securities and Exchange Commission ("SEC") and state-registered firms.

Rule 204-2 under the Investment Advisers Act of 1940 requires RIA firms to make and keep true, accurate and current books and records relating to its investment advisory business In addition, many states have adopted similar books and records rules.

Physical Security and Cybersecurity Policies and Procedures: RIAs must establish, implement, update, and enforce written physical security and cybersecurity policies and procedures reasonably designed to ensure the confidentiality, integrity, and availability of physical and electronic records and information.

(i) Books and records required to be made under the provisions of paragraphs (a)(11) and (a)(16) of this rule shall be maintained and preserved in an easily accessible place for a period of not less than five years, the first two years in an appropriate office of the investment adviser, from the end of the fiscal year ...

Books and Records To Be Retained

Rule 204-2 requires every SEC-registered investment adviser to retain copies of all advertisem*nts and other communications (collectively, "advertisem*nts") that the adviser has circulated, directly or indirectly, to ten or more persons (excluding persons connected with the adviser).

In general, books and records are those books, accounts, records, memoranda, correspondence and other documentation or information that broker-dealer firms have to make and preserve in accordance with the federal securities laws, MSRB rules, FINRA rules and all other applicable laws, rules and regulations (collectively ...

Paragraph (a)(21) of Rule 17a-3 requires a record listing, by name or title, all personnel at an office who, without delay, can explain the types of records the firm maintains at that office, and the information contained in those records.

No matter how young or old an RIA business is, at some point or another, every RIA will be examined.

All other records must be maintained by an investment adviser for five years (in the investment adviser's principal office for at least the first two years; they may be kept in an easily accessible place for the balance of the five years).

Yes, every RIA firm must have a chief compliance officer. Neglecting to appoint someone on your team as CCO is a direct SEC violation. It can also open your firm up to costly risks and conflicts of interest.

How long is an RIA required to keep records in the firm's principal office? ›

They must be able to produce those records promptly in response to a request from securities regulators. Articles of incorporation, as well as any amendments to them, must be maintained in the principal office of the RIA and preserved for at least three years after the termination of the firm.

Keep the annual summaries as long as the account is active. You will need the purchase or sales slips from your brokerage or mutual fund to prove whether you have capital gains or losses for your tax returns.

It's smart to divide your investment records into those you'll use for short-term reference and those that go into long-term files or storage for three to seven years or longer. Once a year, it's a good idea to overhaul your records, discarding those that you no longer need.

17a-4(d) Every member, broker or dealer subject to § 240.17a-3 must preserve during the life of the enterprise and of any successor enterprise all partnership articles or, in the case of a corporation, all articles of incorporation or charter, minute books, and stock certificate books (or, in the case of any other form ...

The amendments to Rule 17a-4 require that a broker-dealer: maintain a record of advertisem*nts and other "communications with the public;" clarify the definitions of organizational documents; and set recordkeepint requirements for new records required to be created pursuant to the amendments to 17a-3, certain exception ...

While they are unregistered, ERAs can still be subject to the SEC's recordkeeping requirements. The SEC has the authority to examine such records, and the recent uptick in enforcement actions implies that they are not hesitant to do so when they believe a violation has occurred.

17a-4(d) Every member, broker or dealer subject to § 240.17a-3 must preserve during the life of the enterprise and of any successor enterprise all partnership articles or, in the case of a corporation, all articles of incorporation or charter, minute books, and stock certificate books (or, in the case of any other form ...

The amendments to Rule 17a-4 require that a broker-dealer: maintain a record of advertisem*nts and other "communications with the public;" clarify the definitions of organizational documents; and set recordkeepint requirements for new records required to be created pursuant to the amendments to 17a-3, certain exception ...

With this change in ruling, registered investment advisers (RIA) now have the ability to use client testimonials, past-performance illustrations and endorsem*nts from third parties. However, these changes are complex and come with a number of restrictions, limitations and a plethora of new disclosure requirements.

RIAs have upheld a fiduciary standard, placing their clients' interests above their own. In contrast, BDs adhered to a somewhat less rigorous suitability rule, requiring them to believe that an investment decision suits a client before recommending it.