Financial Reporting for Investment Advisers

Financial Reporting for Investment Advisers. A. Every investment adviser that has its principal place of business in a state other than this state shall file only such reports as required by the state in which the investment adviser maintains its principal place of business, provided the investment adviser is registered or licensed in such state and is in compliance with such state’s financial reporting requirement. B. Unless an investment adviser is otherwise exempted from complying with the financial reporting requirements of this Rule, every registered investment adviser who has custody of client funds or securities or requires payment of advisory fees six (6) months or more in advance and in excess of Twelve Hundred Dollars ($1,200.00) for any client shall annually file with the Division an audited balance sheet as of the end of the investment adviser’s most recent fiscal year. C. The audited balance sheet filed pursuant to this Rule must be: 1. Examined and prepared in conformity with generally accepted accounting principles; 2. Audited by an independent certified public accountant; 3. Accompanied by an opinion of the accountant as to the report of financial position, and by a note stating the principles used to prepare it, the basis of included securities, and any other explanations required for clarity; and 4. Filed with the Division within ninety (90) days following the end of the investment adviser's fiscal year. D. The Division may reasonably require additional financial documentation to assess the financial soundness of the investment adviser.