§ 23-19-4-11 — Minimum financial requirements; financial reports; amendment; records; audits or inspections; insurance or posting bond; supervision; continuing education; compliance reports

(a) Subject to Section 15(h) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(h)) or Section 222 of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-18a), a rule adopted
or order issued under this article may establish minimum financial
requirements for broker-dealers registered or required to be registered
under this article and investment advisers registered or required to be
registered under this article.
(b) Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(h)) or Section 222(b) of the Investment Advisers Act
of 1940 (15 U.S.C. 80b-18a(b)), a broker-dealer registered or required
to be registered under this article and an investment adviser registered
or required to be registered under this article shall file such financial
reports as are required by a rule adopted or order issued under this
article. If the information contained in a record filed under this
subsection is or becomes inaccurate or incomplete in a material
respect, the registrant shall promptly file a correcting amendment.
(c) Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(h)) or Section 222 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-18a):
(1) a broker-dealer registered or required to be registered under
this article and an investment adviser registered or required to be
registered under this article shall make and maintain the accounts,
correspondence, memoranda, papers, books, and other records
required by rule adopted or order issued under this article;
(2) broker-dealer records required to be maintained under
subdivision (1) may be maintained in any form of data storage
acceptable under Section 17(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78q(a)) if they are readily accessible to the
commissioner; and
(3) investment adviser records required to be maintained under
subdivision (1) may be maintained in any form of data storage
required by rule adopted or order issued under this article.
(d) The records of a broker-dealer registered or required to be
registered under this article and of an investment adviser registered or
required to be registered under this article are subject to such
reasonable periodic, special, or other audits or inspections by a
representative of the commissioner, within or outside this state, as the
commissioner considers necessary or appropriate in the public interest
and for the protection of investors. An audit or inspection may be made
at any time and without prior notice. The commissioner may copy, and
remove for audit or inspection copies of, all records the commissioner
reasonably considers necessary or appropriate to conduct the audit or
inspection. The commissioner may assess a reasonable charge for
conducting an audit or inspection under this subsection.
(e) Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(h)) or Section 222 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-18a), a rule adopted or order issued under this
article may require a broker-dealer or investment adviser that has
custody of or discretionary authority over funds or securities of a
customer or client to obtain insurance or post a bond or other
satisfactory form of security in an amount not to exceed fifty thousand
dollars ($50,000). The commissioner may determine the requirements
of the insurance, bond, or other satisfactory form of security. Insurance
or a bond or other satisfactory form of security may not be required of
a broker-dealer registered under this article whose net capital exceeds,
or of an investment adviser registered under this article whose
minimum financial requirements exceed, the amounts required by rule
or order under this article. The insurance, bond, or other satisfactory
form of security must permit an action by a person to enforce any
liability on the insurance, bond, or other satisfactory form of security
if instituted within the time limitations in IC 23-19-5-9(g).
(f) Subject to Section 15(h) of the Securities Exchange Act of 1934
(15 U.S.C. 78o(h)) or Section 222 of the Investment Advisers Act of
1940 (15 U.S.C. 80b-18a), an agent may not have custody of funds or
securities of a customer except under the supervision of a broker-dealer
and an investment adviser representative may not have custody of
funds or securities of a client except under the supervision of an
investment adviser or a federal covered investment adviser. A rule
adopted or order issued under this article may prohibit, limit, or impose
conditions on a broker-dealer regarding custody of funds or securities
of a customer and on an investment adviser regarding custody of
securities or funds of a client.
(g) With respect to an investment adviser registered or required to
be registered under this article, a rule adopted or order issued under
this article may require that information or other records be furnished
or disseminated to clients or prospective clients in this state as
necessary or appropriate in the public interest and for the protection of
investors and advisory clients.
(h) A rule adopted or order issued under this article may require an
individual registered under section 2 or 4 of this chapter to participate
in a continuing education program approved by the Securities and
Exchange Commission and administered by a self-regulatory
organization or, in the absence of such a program, a rule adopted or
order issued under this article may require continuing education for an
individual registered under section 4 of this chapter.
(i) Subject to section 11.5 of this chapter, the commissioner may
annually select as many as twenty-five percent (25%) of all Indiana
home and branch offices of registered broker-dealers for completion of
compliance reports. Subject to section 11.5 of this chapter, each
broker-dealer office that is selected shall file its compliance report
according to rules adopted by the commissioner under this article not
later than forty-five (45) days after being notified of selection under
this subsection. No charges or other examination fees may be assessed
against a registered broker-dealer as a result of the examination of a
compliance report filed under this subsection unless the examination
results in an investigation or examination made under IC 23-19-6-2(a).

Legislative History

As added by P.L.27-2007, SEC.23. Amended by P.L.149-2009, SEC.1; P.L.156-2009, SEC.22; P.L.1-2010, SEC.94.