Records to be Preserved by Investment Advisers (Rescinded February 29, 2004)

AUTHORITY: sections 409.203 and 409.413(a), RSMo 1986. Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Emergency rescission filed Aug. 25, 2003, effective Sept. 12, 2003, expired March 9, 2004. Rescinded: Filed Aug. 25, 2003, effective Feb. 29, 2004. 15 CSR 30-51.160 Effectiveness and Post-Effective Requirements PURPOSE: This rule specifies when the registration of brokerdealers, agents and investment advisers becomes effective, reports required during effectiveness, and procedures for terminating the effectiveness and effecting withdrawal of registrations. (1) Pending Applications for Registration. (A) Effective Date of Registration. If no denial order is in effect and no proceeding under section 409.4-412, RSMo is pending, registration shall become effective no later than noon of the forty-fifth day after the completed application is filed, unless the applicant has agreed to toll the forty-five (45)-day limitation. The forty-five (45)-day time period shall begin to run once a completed application, including any amendments thereto, is filed with the division. The running of this forty-five (45)-day period is tolled during the time a denial order is in effect, a proceeding under section 409.4-412, RSMo is pending, or by agreement of the applicant. The running of the forty-five (45)-day period shall resume when the denial order is vacated, or the proceeding under section 409.4-412, RSMo is no longer pending. (B) Completeness of the Application. An application shall be considered complete when an application, including any amendments, has been filed with the division. A completed application shall contain comprehensive responses to all applicable questions and all attachments and exhibits, as required by the Act or these rules. (C) Summary Suspension for Applications. 1. Pursuant to section 409.4-412(f), RSMo, the commissioner may summarily suspend an application if: A. The commissioner, through the Securities Division staff, is seeking additional information regarding and/or relating to the application; B. A proceeding is pending under section 409.4-412(a), (b), or (c), RSMo; or C. The applicant is subject to discipline or disqualification under the provisions of section 409.4-412(d), RSMo. 2. A summary suspension order issued pursuant to subparagraph (1)(C)1.A. shall remain pending for thirty (30) days after all requested information has been provided and during this time the person subject to the summary suspension order may request a hearing. (D) Orders of Cancellation for Incomplete Applications. Any application, the filing of which is not complete within a period of one (1) year following the application’s original filing, shall be presumed subject to the entry of an order of cancellation pursuant to section 409.4-408(e), RSMo of the Act. (2) Duration of Registration. (A) Expiration of Registration. Every registration of a brokerdealer, agent, investment adviser, or investment adviser representative expires on December 31 of each year, unless renewed or unless sooner revoked, canceled, or withdrawn (section 409.4-406(d), RSMo). (B) Failure to Renew. Upon expiration of a registration, any subsequent application for registration shall be considered and treated as an application for initial registration. (C) Applications for renewal of registration filed directly with the commissioner shall be filed on the appropriate form marked renewal (see 15 CSR 30-51.020) with required information and exhibits, no earlier than sixty (60) days and no later than thirty (30) days before the expiration date of the registration concerned. Applications filed with the Central Registration Depository (CRD) System or Investment Adviser Registration Depository (IARD) System shall be timely filed in accordance with the requirements of the CRD or IARD. (D) An applicant for renewal registration may incorporate by reference in the application documents previously filed to the extent the documents are currently accurate. (3) Continuing Duty of Applicants and Registrants to Disclose Material Information. (A) Amendments to Applications for Material Change. During the pendency of any application, or effectiveness of any registration, every broker-dealer, agent, investment adviser, or investment adviser representative shall immediately report to the commissioner in writing any material change in any information, answers, responses, exhibits, or schedules submitted or circumstances disclosed in its last prior application. A correcting amendment shall be filed with the division at the time of occurrence or discovery of these changes, and not later than thirty (30) days following the specified event or occurrence. If the application was submitted through the CRD System or IARD System, any amendment shall be submitted in accordance with the guidelines of the CRD or IARD System. (B) Termination of an Agent or Investment Adviser Representative. 1. Duty of broker-dealer, issuer or investment adviser. When an agent’s or representative’s association with the broker-dealer, issuer or investment adviser is discontinued or terminated by either party, the broker-dealer, issuer or investment adviser must file a Form U-5 within thirty (30) days of the discontinuance or termination, stating the date of and reasons for the discontinuance or termination. 2. Duty of agent or investment adviser representative. When an agent’s or representative’s association with a broker-dealer or investment adviser registered in Missouri is discontinued or terminated by either party, the agent or investment adviser representative must file, within thirty (30) days of the discontinuance or termination, amended documents reflecting association with another broker-dealer or investment adviser. 3. Transferring agents and transferring investment adviser representatives. A. For agents and/or investment adviser representatives registered under this Act who terminate from one Missouri registered broker-dealer, investment adviser, or federal covered investment adviser and transfer to another Missouri registered broker-dealer, investment adviser, or federal covered investment adviser that file a completed application with the division within thirty (30) days after their termination and whose CRD record does not contain any new or amended disciplinary disclosure(s) within the previous twelve (12) months, their registration shall become immediately effective as of the date of the completed filing, unless an order is issued pursuant to section 409.4-408(d), RSMo. B. For agents and/or investment adviser representatives registered under this Act who terminate from one Missouri registered broker-dealer, investment adviser, or federal covered investment adviser and transfer to another Missouri registered broker-dealer, investment adviser, or federal covered investment adviser that file a completed application with the division within thirty (30) days after their termination and whose CRD record contains a new or amended disciplinary disclosure within the previous twelve (12) months, their registration shall become temporarily effective for thirty (30) days as of the date of the completed filing, unless an order is issued pursuant to section 409.4-408(d), RSMo. The temporary registration becomes automatically effective on the thirty-first day after the completed filing unless an order is issued pursuant to section 409.4-408(c), RSMo. (C) Acquisition of Broker-Dealer or Investment Adviser. 1. When a person or a group of persons, directly or indirectly or acting by or through one (1) or more persons, proposes to acquire a controlling interest in a broker-dealer or investment adviser registrant and when the acquirer, within the preceding ten (10) years, has committed any act that would result in a yes answer to any disciplinary question on the Form BD or ADV or would require disclosure under 15 CSR 3051.160(3), the resulting entity, prior to the acquisition, shall file with the division: A. A new application for registration on the forms prescribed by rule, together with all required exhibits and fees; and B. At the time the new application is filed, a notice of withdrawal, termination or cancellation of registration of the acquired entity on the forms prescribed by rule, effective upon disposition of the new application by the division. 2. For purposes of this section, controlling interest means possession of the power to direct or cause the direction of the management or policies of a company, whether through ownership of securities, by contract or otherwise. Any individual or firm that directly or indirectly has the right to vote twentyfive percent (25%) or more of the voting securities of a company or is entitled to twenty-five percent (25%) or more of its profits is presumed to control that company. (D) Written Disclosure Statement. 1. An investment adviser, registered or required to be registered pursuant to the Missouri Securities Act, shall furnish each advisory client and prospective advisory client with a written disclosure statement that may be either a copy of Part II of its Form ADV, or a written document containing at least the information required by Part II of Form ADV. 2. An investment adviser shall deliver the written disclosure statement to an advisory client or prospective advisory client not less than forty-eight (48) hours prior to entering into any written or oral investment advisory contract with such client or prospective client, or at the time of entering into any such contract, if the advisory client has a right to terminate the contract without penalty within five (5) business days after entering into the contract. 3. An investment adviser annually shall, without charge, deliver or offer in writing to deliver to each of its advisory clients the written disclosure statement. (4) Withdrawal of Registration. (A) Broker-Dealers, Investment Advisers and Federal Covered Investment Advisers. 1. Every broker-dealer and investment adviser who desires to withdraw their registration shall file the appropriate Form BDW or ADV-W. Every federal covered adviser who desires to withdraw their notice filing shall file the appropriate ADV-W. 2. Unless a proceeding is pending under sections 409.4-412, 409.6-602, 409.6-603 or 409.6-604, RSMo when the application to withdraw is filed, the withdrawal of registration by a brokerdealer or investment adviser shall become effective on the date indicated in the Form BDW or Form ADV-W, but in no event more than sixty (60) days after the filing of the Form BDW or Form ADV-W. (B) Broker-Dealer Agents and Investment Adviser Representatives. 1. Unless a proceeding is pending under sections 409.4-412, 409.6-602, 409.6-603 or 409.6-604, RSMo when the application to withdraw is filed, the withdrawal of registration by an agent or investment adviser representative, pursuant to section 409.4-409, RSMo shall become effective at the earlier of the date a Form U-5 is filed, the date indicated in the Form U-5 or the date of withdrawal of the agent’s or investment adviser representative’s respective broker-dealer or investment adviser. (5) Merger, Consolidation or Reorganization of Broker-Dealers. In the event of a merger, consolidation, or reorganization of an existing registered broker-dealer, and the change can be effected through the CRD System, then such documentation and information shall be filed in accordance with the guidelines of the CRD System. If the change cannot be processed through the CRD System, the following documents must be filed with the commissioner by the participating broker-dealers within ten (10) days following a merger, consolidation or reorganization: (A) The broker-dealer dissolving at the consummation of the merger or who will become a part of an existing broker-dealer upon reorganization or consolidation must file: 1. A termination of its broker-dealer registration on Form BDW; 2. A termination of all agent registrations; and 3. A complete explanation of the proposed merger, consolidation or reorganization accompanied by the agreement effecting the merger, consolidation or reorganization. (B) The broker-dealer who will be the surviving corporation upon consummation of the merger or who will be the named broker-dealer after the reorganization or consolidation must file: 1. A complete explanation of the proposed merger; 2. Form U-4 applications plus supporting documents of all registered agents of the dissolving broker-dealer to be transferred to the surviving, consolidated or reorganized broker-dealer in accordance with 15 CSR 30-51.160(3) and 15 CSR 30-51.020; and 3. If the name of the surviving, consolidated or reorganized broker-dealer will change, an amended Form BD, as appropriate and all other properly amended documents required by 15 CSR 30-51.020 and 15 CSR 30-51.160. AUTHORITY: sections 409.4-406, 409.4-408, 409.4-409, 409.4411(b) and 409.6-605, RSMo Supp. 2003.* Original rule filed June 25, 1968, effective Aug. 1, 1968. Amended: Filed May 21, 1969, effective Aug. 1, 1969. Amended: Filed July 21, 1972, effective Aug. 1, 1972. Amended: Filed Nov. 15, 1974, effective Nov. 25, 1974. Amended: Filed Dec. 19, 1975, effective Dec. 31, 1975. Amended: Filed Aug. 11, 1978, effective Feb. 11, 1979. Emergency amendment filed Aug. 15, 1983, effective Aug. 29, 1983, expired Dec. 26, 1983. Amended: Filed Aug. 15, 1983, effective Nov. 11, 1983. Amended: Filed March 27, 1989, effective June 12, 1989. Emergency amendment filed Aug. 4, 1995, effective Aug. 14, 1995, expired Dec. 11, 1995. Amended: Filed Aug. 4, 1995, effective Jan. 30, 1996. Rescinded and readopted: Filed Dec. 17, 2001, effective July 30, 2002. Amended: Filed Aug. 30, 2002, effective Feb. 28, 2003. Emergency amendment filed Sept. 9, 2003, effective Sept. 19, 2003, expired March 16, 2004. Amended: Filed Aug. 28, 2003, effective Feb. 29, 2004. Amended: Filed Aug. 10, 2004, effective Feb. 28, 2005. *Original authority: 409.4-406, RSMo 2003; 409.4-408, RSMo 2003; 409.4-409, RSMo 2003; 409.4-411, RSMo 2003; and 409.6-605, RSMo 2003.