292.336 Recordkeeping and reporting requirements -- Examination by
1,164 words·~5 min read·
/ky/292-336A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
commissioner -- Administrative regulations -- Central depository system for
documents -- Investment advisers -- Required policies and procedures.
(a)Every registered broker-dealer, firm employing issuer agents, and investment
adviser shall make and keep all accounts, correspondence, memoranda,
papers, books, and other records which the commissioner by rule or order
prescribes.
(b)All records required shall be:
1. Preserved for three
(3)years unless the commissioner, by administrative
regulation or order, prescribes otherwise for particular types of records;
and
2. Kept within this state or shall, at the request of the commissioner, be
made available at any time for examination by him or her either in the
principal office of the registrant or by production of exact copies thereof
in this state.
(c)If a broker-dealer is registered with the United States Securities and Exchange
Commission, then the books and records required by this section are limited
to those that the Securities Exchange Act of 1934, 15 U.S.C. secs. 78a et seq.,
requires the broker-dealer to maintain.
(d)If an investment adviser has his or her principal place of business in another
state, then the requirements of this subsection shall be limited to the books
and records requirements of that state, if the adviser is registered in that state
and in compliance with its recordkeeping requirements.
(a)Subject to paragraphs
(b)and
(c)of this subsection, every registered broker-
dealer, investment adviser, and firm employing issuer agents shall file any
reports required by the commissioner through administrative regulation or
order promulgated under this chapter.
(b)If a broker-dealer is registered with the United States Securities and Exchange
Commission, then the reports required by this subsection shall be limited to
those required under the Securities Exchange Act of 1934, 15 U.S.C. secs. 78a
et seq.
(c)If an investment adviser has his or her principal place of business in another
state, then the requirements of this subsection shall be limited to the reporting
requirements of that state, if the adviser is registered in that state and in
compliance with its reporting requirements.
(a)Subject to paragraph
(b)of this subsection, if the information contained in any
document filed is or becomes inaccurate or incomplete in any material
respect, then the broker-dealer, investment adviser, or firm employing issuer
agents, as applicable, shall promptly file a correcting amendment.
(b)In the case of a covered adviser, the adviser shall file only copies of those
documents required to be filed with the United States Securities and Exchange
Commission.
(a)The commissioner may conduct examinations, within or outside this state, of
each broker-dealer, issuer agent, or investment adviser at such times and in
such scope as he or she determines.
(b)1. Examinations of each broker-dealer, issuer agent, or investment adviser
may be made without prior notice to the broker-dealer, issuer agent, or
investment adviser.
2. The expense reasonably attributable to any examination shall be paid by
the broker-dealer, issuer agent, or investment adviser whose business is
examined, but the expense so payable shall not exceed an amount which
the commissioner by administrative regulation prescribes.
(c)For the purpose of avoiding unnecessary duplication of examinations, the
commissioner, insofar as he or she deems it practicable in administering this
subsection, may cooperate with securities administrators of other states, the
United States Securities and Exchange Commission, and any national
securities exchange or national securities association registered under the
Securities Exchange Act of 1934, 15 U.S.C. secs. 78a et seq.
(a)Every investment adviser that is registered or required to be registered shall
establish written procedures relating to a business continuity and succession
plan.
(b)The plan shall:
1. Be based upon the facts and circumstances of the investment adviser's
business model, including the size of the firm, types of services
provided, and number of locations;
2. At a minimum, provide for:
a. The protection, backup, and recovery of books and records;
b. Alternate means of communication with customers, key personnel,
employees, vendors, service providers, including third-party
custodians, and regulators, including but not limited to providing
notice of:
i. A significant business interruption;
ii. The death or unavailability of key personnel; and
iii. Other disruptions or cessations of business activities;
c. Office relocation in the event of temporary or permanent loss of a
principal place of business; and
d. Assignment of duties to qualified responsible persons in the event
of the death or unavailability of key personnel; and
3. Otherwise minimize service disruptions and client harm that could result
from a sudden significant business interruption.
(c)The investment adviser shall, at least annually, review the plan, and the
review shall be documented and maintained for three
(3)years.
(a)Every investment adviser that is registered or required to be registered shall
establish and implement written physical security and cybersecurity policies
and procedures designed to ensure the confidentiality, integrity, and
availability of physical and electronic records and information.
(b)The policies and procedures shall:
1. Be tailored to the investment adviser's business model, taking into
account the size of the firm, types of services provided, and the number
of locations;
2. At a minimum:
a. Protect against reasonably anticipated threats or hazards to the
security or integrity of client records and information;
b. Ensure that the investment adviser safeguards confidential client
records and information; and
c. Protect any records and information for which the release could
result in harm or inconvenience to any client; and
3. Cover at least the following five
(5)functions:
a. Identification - development of organizational understanding to
manage information security risk to systems, assets, data, and
capabilities;
b. Protection - development and implementation of appropriate
safeguards to ensure delivery of critical infrastructure services;
c. Detection - development and implementation of appropriate
activities to identify the occurrence of an information security
event;
d. Response - development and implementation of appropriate
activities to take action regarding a detected information security
event; and
e. Recovery - development and implementation of appropriate
activities to maintain plans for resilience and to restore any
capabilities or services that were impaired due to an information
security event.
(c)1. The investment adviser shall, at least annually, review the policies and
procedures to ensure the adequacy of the security measures and
effectiveness of their implementation.
2. The review shall be documented and previous versions of the policies
and procedures shall be maintained for three
(3)years from the date of
development.
(7)The commissioner may by administrative regulation prohibit unreasonable charges,
profits, commissions, or other compensation of broker-dealers and investment
advisers.
(8)The commissioner may promulgate administrative regulations to prescribe rules for
the conduct of business by broker-dealers and investment advisers which he or she
finds appropriate in the public interest and for the protection of investors.
(9)The commissioner may enter into an arrangement, agreement, or other working
relationship with federal, other state, and self-regulatory authorities whereby
documents may be filed and maintained in a central depository system with the
Financial Industry Regulatory Authority (FINRA) or other agencies or authorities.