1.1.2.4 Post-Registration Requirements
In addition to the ongoing requirement to file the appropriate renewal forms on an annual basis, state-registered investment advisers must also meet ongoing post-registration requirements. These requirements include:
• Financial reports. Advisers may be required to file reports regarding the firm’s financial condition. If the information filed on these forms becomes inaccurate at any point, updated reports must be filed as soon as possible.
• Recordkeeping. Advisers are required to meet the recordkeeping requirements put in place by each state in which they operate.
» Advisers must keep virtually every form of client record and marketing literature on file for five years. This five-year period begins at the end of the fiscal year in which the record was created. Also, these records must be easily accessible for two of the five years.
» Certain records, such as partnership articles, articles of incorporation, charters, minute books, and stock certificate books, must be kept for at least three years after a firm goes out of business.
» A state cannot require an investment adviser to maintain any books and records in addition to those required under the laws of the state in which the adviser’s principal office is located, as long as the firm is registered and is complying with the requirements of that state.
» The administrator is allowed to view an investment adviser’s books and records. This allowance extends to the books and records of investment advisers from different states when the administrator needs to review such records as part of an investigation.
• Audits. All registered investment advisers (RIAs) are subject to audits, also called examinations, by the states in which they are licensed at any time and for any reason that the administrator thinks is in the public interest. As part of the audit, the state administrator may examine any records it deems useful. The administrat