1. An investment adviser who is registered or required to be registered under the Investment Advisers Act of 1940 shall maintain the following, which are true, accurate and current:(a) A journal which includes:(1) Each cash receipt and disbursement record; and(2) Any other record of original entry forming the basis of an entry in any ledger;(b) A ledger or similar record, whether general or auxiliary, which reflects asset, liability, reserve, capital, income and expense accounts;(c) A memorandum of each: (1) Order given by the investment adviser for the purchase or sale of a security, including, without limitation, an order entered pursuant to the discretionary power of the investment adviser;(2) Instruction received by the investment adviser from a client concerning the purchase, sale, receipt or delivery of a particular security; and(3) Modification or cancellation of any order or instruction described in subparagraph (1) or (2);(d) Any checkbook, bank statement, cancelled check or cash reconciliation of the investment adviser;(e) Any bill or statement, or a copy thereof, whether paid or unpaid, which relates to the investment advising business of the investment adviser;(f) Any trial balance, internal audit working paper relating to the business of the investment adviser and any of the following financial statements: (1) A balance sheet prepared in accordance with generally accepted accounting principles;(3) A cash flow statement; or(4) A net worth computation, as applicable;(g) Except as otherwise provided in subsection 3, originals of all written communications received by the investment adviser and copies of all written communications sent by the investment adviser relating to: (1) Each recommendation made or proposed to be made and advice given or proposed to be given;(2) Each receipt, disbursement or delivery of funds or securities; and(3) The placing or execution of each order to purchase or sell any security;(h) A list or other record of each account of the investment adviser that identifies any account in which the investment adviser is vested with a discretionary power for a fund, security or transaction of a client;(i) A copy of any power of attorney or like document which evidences the granting of discretionary authority to the investment adviser by a client;(j) A physical copy of: (1) Each agreement entered into by the investment adviser with a client; and(2) Any other written agreement relating to the business of the investment adviser;(k) A file containing a copy of each notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication, including, without limitation, electronic media, that the investment adviser circulates or distributes, whether directly or indirectly, to two or more persons not connected with the business of the investment adviser. If the document recommends the purchase or sale of a specific security and does not state the reasons for the recommendation, the file must contain a memorandum indicating the reasons for the recommendation by the investment adviser;(l) A copy of each written statement and an amendment or revision thereof, given or sent to a client or prospective client who subsequently became a client of the investment adviser, and a record of the dates that the statement, amendment or revision was given, or offered to be given, to the client or prospective client;(m) For each client obtained by the investment adviser by means of a solicitor to whom a cash fee was paid by the investment adviser:(1) Evidence of a written agreement where the adviser is a party and which is related to the payment of the fee;(2) A signed and dated acknowledgment evidencing the receipt by the client of the investment disclosure statement and the written disclosure statement of the solicitor; and(3) A copy of the written disclosure statement of the solicitor;(n) A record of each account, book, internal working paper or any other document that is necessary to form the basis for, or demonstrate, the calculation of the performance or rate of return of each managed account or securities recommendation in any notice, circular, advertisement, newspaper article, investment letter, bulletin or other communication, including, without limitation, electronic media, that the investment adviser circulates or distributes, whether directly or indirectly, to two or more persons not related to the investment advising business of the investment adviser;(o) A file containing a copy of each written communication received or sent by the investment adviser relating to:(1) Litigation involving the investment adviser or a representative or employee of the investment adviser; and(2) Any written complaint of a client or customer of the investment adviser;(p) Any written information concerning a client that is the basis for making a recommendation or providing any investment advice to the client;(q) Any written procedure reasonably designed to achieve compliance with a security law or regulation;(r) A file containing a copy of each application, amendment, renewal filing or other correspondence, other than a notice of general dissemination relating to a registrant or an advisory representative of the investment adviser, as defined in section 14, that was filed with or received from any state or federal agency or regulatory organization;(s) A copy of the following documents which must include original signatures of the appropriate signatory of the investment adviser and the representative of the investment adviser:(1) Each Uniform Application for Securities Industry Registration or Transfer (Form U-4); and(2) Each amendment to Disclosure Reporting Pages (DRP U-4), which must be made available for inspection upon request;(t) If the investment adviser inadvertently held or obtained a security or fund of a client and returned the security or fund to the client within 3 business days, or forwarded a third-party check within 24 hours, a ledger or other listing relating to the inadvertent custody, which must include, without limitation: (2) The type of security and series;(4) For debt instruments, the denomination, interest rate and maturity date;(5) The certificate number, including, without limitation, the alphabetical prefix or suffix;(6) The name in which the security or fund is registered;(7) The date the security or fund was obtained or given to the investment adviser;(8) The date the security, fund or third-party check was sent to the client or sender;(9) The form of delivery to the client or sender or a copy of the form of delivery; and(10) The mail confirmation number, if applicable, or any confirmation by the client or sender of the return of the fund or security; and(u) If an investment adviser obtains possession of securities that are acquired from an issuer in a transaction or chain of transactions not involving a public offering in compliance with the provisions of section 7: (1) A record showing the name, address and phone number of the issuer or current transfer agent, and other applicable contract information pertaining to the party responsible for recording client interests in the securities; and(2) A copy of any legend, shareholder agreement or other agreement showing that the securities are transferable only with the prior consent of the issuer or holder of the outstanding securities of the issuer.2. The memorandum described in paragraph (c) of subsection 1 must, as applicable: (a) Show the terms and conditions of the order, instruction, modification or cancellation;(b) Identify the person connected with the investment adviser who recommended the transaction to the client and the person who placed the order; and(c) Show the account for which the order was entered, the date of entry and the broker dealer or bank with or through whom the transaction was effected, where appropriate.3. For the purposes of paragraph (g) of subsection 1:(a) If a notice, circular or other advertisement was sent by an investment adviser who offered a report, analysis, publication or other investment advisory service to more than 10 persons, the investment adviser is not required to keep a record of the names and addresses of the persons to whom the notice, circular or other advertisement was sent, unless the notice, circular or advertisement was distributed to persons named on any list relating to a requirement for recordkeeping, in which case the investment adviser must retain with the copy of the notice, circular or advertisement a memorandum describing the list and its source.(b) "Communication" does not include an unsolicited marketing letter or other similar communication of general public distribution not prepared by or for the investment adviser.4. The documents described in paragraph (m) of subsection 1 must be in compliance with the Investment Advisers Act of 1940.5. As used in this section: (a) "Discretionary power" does not include discretion as to the price at which or the time when a transaction is or is to be effected, if, before an order is given by an investment adviser, the client directed or approved the purchase or sale of a definite amount of the particular security.(b) "Performance of managed accounts" means the retention of each: (1) Account statement, if the statement reflects all debits, credits and other transactions in the account of the client for the period of the statement; and(2) Worksheet necessary to demonstrate the calculation of the performance or rate of return of each account.(c) "Solicitor" means any person or entity who, for compensation, acts as an agent of an investment adviser in referring potential clients.Nev. Admin. Code § 90.Sec. 13
Added to NAC by Sec'y of State by R018-21A, eff. 6/2/2023