N.D. Cent. Code § 10-04-10.3

10-04-10.3. Postregistration provisions

1. Every broker-dealer, agent, investment adviser, and investment adviser representative

conducting business in this state shall make and keep such accounts,

correspondence, memoranda, papers, books, and other records as described below:

a. With the exclusion of a broker-dealer whose activities are limited to the sale of

securities that it issues and who is not a member or required to be a member of

any self-regulatory organization, every broker-dealer registered in or conducting

business in this state, and each branch office located in or conducting business in

this state, must keep and maintain all records as required by:

(1) Federal statutes or by rules or regulations promulgated by the securities and

exchange commission.

(2) Rules promulgated by any securities exchange or self-regulatory

organization of which the broker-dealer is a member.

(3) The laws, rules, or regulations of any state in which the broker-dealer is

registered or maintains a place of business from which it conducts securities

business in North Dakota.

b. Every investment adviser which maintains its principal place of business in any

state, other than this state, and is registered as an investment adviser in the state

in which it maintains its principal place of business, shall keep and maintain such

books and records as required by the state in which it maintains its principal place

of business.

c. Every investment adviser which maintains its principal place of business in this

state, or is not registered or exempt from registration in the state in which it

maintains its principal place of business, shall keep and maintain the following

books and records for a period of three years:

(1) Financial documents of the investment adviser which shall include:

(a) Journals and ledgers tracking income and expenses of the investment

adviser. These documents must be continually maintained to within

thirty days of current.

(b) Trial balances, financial statements, and internal audit papers.

(c) Checkbooks and statements on any type of account on which the

investment adviser has check-writing privileges.

(d) Statements regarding any account of the investment adviser with any

insurance company, broker-dealer, investment adviser, federal

covered adviser, or financial institution.

(2) A file which contains copies of all incoming and outgoing correspondence

between the investment adviser or its representative and any of its

customers, prospective customers, or former customers.

(3) A file containing a copy of each customer complaint against the investment

adviser or a representative of the investment adviser.

(4) A file containing all advertisements used by the investment adviser or a

representative of the investment adviser. To the extent that past

performance of the investment adviser is used in advertising materials, the

investment adviser shall maintain all accounts, records, and internal working

papers that form the basis of the performance of the investment adviser.

(5) Copies of all contracts between the investment adviser and its customers.

(6) A manual regarding the supervisory procedures of the investment adviser,

unless the investment adviser is wholly owned by the only representative of

the investment adviser and the investment adviser has no employees.

(7) With respect to discretionary accounts:

(a) A list of all discretionary accounts.

(b) A file containing all discretionary trading agreements.
adviser and its customers.

(6) A manual regarding the supervisory procedures of the investment adviser,

unless the investment adviser is wholly owned by the only representative of

the investment adviser and the investment adviser has no employees.

(7) With respect to discretionary accounts:

(a) A list of all discretionary accounts.

(b) A file containing all discretionary trading agreements.

(c) A list of all trades that were conducted on a discretionary basis.

(8) All records created by the investment adviser or provided by a client or

prospective client of an investment adviser regarding the financial condition

of the client or prospective client.

(9) Records tracking all securities purchased by or advice provided by the

investment adviser and the payment for the services if any. These records

shall disclose whether the investment adviser or the investment adviser

representative had any direct or indirect beneficial interest in the investment

involved.

(10) A copy of part 2 of the form ADV, annually updated and filed with the

department, and a summary of material changes to part 1 and part 2 of form

ADV, as required to be filed with the department within ninety days of the

material change.

(11) A list of all parties to whom referral fees have been paid and the amount of

money paid to each such person.

(12) A record containing the date of receipt and date of transmission of customer

funds provided to the investment adviser for the purpose of deposit with the

custodian of the investment adviser. Copies of any checks or electronic

transfer instructions, must be maintained with the record.

All records required to be maintained pursuant to subdivision a or b must be

preserved as set forth in the rules or regulations of the jurisdiction originating the

recordkeeping requirement. The commissioner may by rule enhance or waive the

requirements of this subsection.

It is a violation of this subsection for any person who is registered, required to be

registered, or is affiliated with or employed by any such entity, to create or cause to be

created any record discussed in this subsection, if such record contains a material

misstatement or misrepresentation regarding a customer or a customer's investments

and the person knew or should have known of the falsity of the information or acted in

reckless disregard of the truthfulness of the information.

2. Every registered broker-dealer, agent, investment adviser, and investment adviser

representative shall file such financial reports as the commissioner prescribes by rule.

3. If the information contained in any document filed with the commissioner is or

becomes inaccurate or incomplete in any material respect, the registrant shall

promptly file a correcting amendment.

4. All the records of any registered person are subject at any time or from time to time to

such reasonable periodic, special, or other examinations by representatives of the

commissioner, within or outside this state, as the commissioner deems necessary or

appropriate in the public interest or for the protection of investors. For the purpose of

avoiding unnecessary duplication of examinations, the commissioner, if deemed

practicable in administering this subsection, may cooperate with the securities

administrators of other states, the securities and exchange commission, any national

securities exchange or national securities association registered under the Securities

Exchange Act of 1934, or any other jurisdiction, agency, or organization charged by

law or statute with regulating or prosecuting any aspect of the securities business, and

in so cooperating may share any information obtained as a result of any investigation

or examination.

5. The commissioner and the commissioner's representatives may copy records or

require a registrant to copy records and provide the copies to the commissioner and
ction, agency, or organization charged by

law or statute with regulating or prosecuting any aspect of the securities business, and

in so cooperating may share any information obtained as a result of any investigation

or examination.

5. The commissioner and the commissioner's representatives may copy records or

require a registrant to copy records and provide the copies to the commissioner and

the commissioner's representatives to the extent and in a manner reasonable under

the circumstances.