{"data":{"id":"us-ky/krs-292.336","jurisdiction":"us-ky","citation":"KRS 292.336","heading":"Recordkeeping and reporting requirements -- Examination by","body":"commissioner -- Administrative regulations -- Central depository system for\ndocuments -- Investment advisers -- Required policies and procedures.\n(1) (a) Every registered broker-dealer, firm employing issuer agents, and investment\nadviser shall make and keep all accounts, correspondence, memoranda,\npapers, books, and other records which the commissioner by rule or order\nprescribes.\n(b) All records required shall be:\n1. Preserved for three (3) years unless the commissioner, by administrative\nregulation or order, prescribes otherwise for particular types of records;\nand\n2. Kept within this state or shall, at the request of the commissioner, be\nmade available at any time for examination by  him or her either in the\nprincipal office of the registrant or by production of exact copies thereof\nin this state.\n(c) If a broker-dealer is registered with the United States Securities and Exchange\nCommission, then the books and records required by this  section are limited\nto those that the Securities Exchange Act of 1934, 15 U.S.C. secs. 78a et seq.,\nrequires the broker-dealer to maintain.\n(d) If an investment adviser has his or her principal place of business in another\nstate, then the requirements of this subsection shall be limited to the books\nand records requirements of that state, if the adviser is registered in that state\nand in compliance with its recordkeeping requirements.\n(2) (a) Subject to paragraphs (b) and (c) of this subsection, every regi stered broker-\ndealer, investment adviser, and firm employing issuer agents shall file any\nreports required by the commissioner through administrative regulation or\norder promulgated under this chapter.\n(b) If a broker-dealer is registered with the United States Securities and Exchange\nCommission, then the reports required by this subsection shall be limited to\nthose required under the Securities Exchange Act of 1934, 15 U.S.C. secs. 78a\net seq.\n(c) If an investment adviser has his or her principal place of business in another\nstate, then the requirements of this subsection shall be limited to the reporting\nrequirements of that state, if the adviser is registered in that state and in\ncompliance with its reporting requirements.\n(3) (a) Subject to paragraph (b) of this subsection, if the information contained in any\ndocument filed is or becomes inaccurate or incomplete in any material\nrespect, then the broker -dealer, investment adviser, or firm employing  issuer\nagents, as applicable, shall promptly file a correcting amendment.\n(b) In the case of a covered adviser, the adviser shall file only copies of those\ndocuments required to be filed with the United States Securities and Exchange\nCommission.\n(4) (a) The commissioner may conduct examinations, within or outside this state, of\neach broker-dealer, issuer agent, or investment adviser at such times and in\nsuch scope as he or she determines.\n(b) 1. Examinations of each broker -dealer, issuer agent, or investme nt adviser\nmay be made without prior notice to the broker -dealer, issuer agent, or\ninvestment adviser.\n2. The expense reasonably attributable to any examination shall be paid by\nthe broker-dealer, issuer agent, or investment adviser whose business is\nexamined, but the expense so payable shall not exceed an amount which\nthe commissioner by administrative regulation prescribes.\n(c) For the purpose of avoiding unnecessary duplication of examinations, the\ncommissioner, insofar as he or she deems it practicable in administering this\nsubsection, may cooperate with securities administrators of other states, the\nUnited States Securities and Exchange Commission, and any national\nsecurities exchange or national securities association registered under the\nSecurities Exchange Act of 1934, 15 U.S.C. secs. 78a et seq.\n(5) (a) Every investment adviser that is registered or required to be registered shall\nestablish written procedures relating to a business continuity and succession\nplan.\n(b) The plan shall:\n1. Be based upon the facts and circumstances of the investment adviser's\nbusiness model, including the size of the firm, types of services\nprovided, and number of locations;\n2. At a minimum, provide for:\na. The protection, backup, and recovery of books and records;\nb. Alternate means of communication with customers, key personnel,\nemployees, vendors, service providers, including third -party\ncustodians, and regulators, including but not limited to providing\nnotice of:\ni. A significant business interruption;\nii. The death or unavailability of key personnel; and\niii. Other disruptions or cessations of business activities;\nc. Office relocation in the event of temporary or permanent loss of a\nprincipal place of business; and\nd. Assignment of duties to qualified responsible person s in the event\nof the death or unavailability of key personnel; and\n3. Otherwise minimize service disruptions and client harm that could result\nfrom a sudden significant business interruption.\n(c) The investment adviser shall, at least annually, review the  plan, and the\nreview shall be documented and maintained for three (3) years.\n(6) (a) Every investment adviser that is registered or required to be registered shall\nestablish and implement written physical security and cybersecurity policies\nand procedures  designed to ensure the confidentiality, integrity, and\navailability of physical and electronic records and information.\n(b) The policies and procedures shall:\n1. Be tailored to the investment adviser's business model, taking into\naccount the size of the f irm, types of services provided, and the number\nof locations;\n2. At a minimum:\na. Protect against reasonably anticipated threats or hazards to the\nsecurity or integrity of client records and information;\nb. Ensure that the investment adviser safeguards confidential client\nrecords and information; and\nc. Protect any records and informati on for which the release could\nresult in harm or inconvenience to any client; and\n3. Cover at least the following five (5) functions:\na. Identification - development of organizational understanding to\nmanage information security risk to systems, assets, da ta, and\ncapabilities;\nb. Protection - development and implementation of appropriate\nsafeguards to ensure delivery of critical infrastructure services;\nc. Detection - development and implementation of appropriate\nactivities to identify the occurrence of an information security\nevent;\nd. Response - development and implementation of appropriate\nactivities to take action regarding a detected information security\nevent; and\ne. Recovery - development and implementation of appropriate\nactivities to maintain plans for resilience and to restore any\ncapabilities or services that were impaired due to an information\nsecurity event.\n(c) 1. The investment adviser shall, at least annually, review the policies and\nprocedures to ensure the adequacy of the security measures a nd\neffectiveness of their implementation.\n2. The review shall be documented and previous versions of the policies\nand procedures shall be maintained for three (3) years from the date of\ndevelopment.\n(7) The commissioner may by administrative regulation pro hibit unreasonable charges,\nprofits, commissions, or other compensation of broker -dealers and investment\nadvisers.\n(8) The commissioner may promulgate administrative regulations to prescribe rules for\nthe conduct of business by broker -dealers and investment advisers which he or she\nfinds appropriate in the public interest and for the protection of investors.\n(9) The commissioner may enter into an arrangement, agreement, or other working\nrelationship with federal, other state, and self -regulatory authorities  whereby\ndocuments may be filed and maintained in a central depository system with the\nFinancial Industry Regulatory Authority (FINRA) or other agencies or authorities.","path":["KRS Chapter 292"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53289","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:23Z","sha256":"4cd942a689c2f3d0107eb234fd225c0e2257bc8def08c91694ac49c37900b269","source_id":"us-ky","stale":false,"prev":"us-ky/krs-292.335","next":"us-ky/krs-292.337"},"notice":"GroundRules: Original legal text. Not legal advice."}