02.02.05.17

.17 Financial Reporting Requirements for Certain Investment Advisers.

A. A registered investment adviser that has custody of client funds or securities, or requires payment of advisory fees 6 months or more in advance and in excess of $500 per client, shall file with the Commissioner an audited balance sheet as of the end of the investment adviser's fiscal year. Each balance sheet filed under this regulation shall be:

(1) Audited by an independent certified public accountant;

(2) Prepared in conformity with generally accepted accounting principles; and

(3) Accompanied by a note stating the principles used to prepare it, the basis of included securities or assets, and any other explanations required for clarity.

B. The financial statements required by this regulation shall be filed with the Commissioner within 90 days following the end of the investment adviser's fiscal year.