Rule 206(4)-2/title>   </head> <META NAME="keywords" CONTENT="form adv, form u4, compliance manual, investment adviser, investment advisor, hedge fund, registered representative, financial planner, managed account, notice filing, financial news, private offerings"> <META NAME="alias" CONTENT="http://www.moneymanagerservices.com/"> <META NAME="owner" CONTENT="contactus@moneymanagerservices.com "> <META NAME="description" CONTENT="A one-stop source for information and resources for investment advisers, financial planners, hedge fund managers, and those getting started in the advisory business. The site has compliance procedures, the Form ADV, investment management agreements, financial news, guidance on the securities laws, and private offering materials. "> <SCRIPT LANGUAGE="JavaScript">  </SCRIPT> <body BGCOLOR="WHITE"> <TABLE WIDTH="605" CELLSPACING="0" CELLPADDING="2" BORDER="5" BORDERCOLOR="#8BA184"> <TR><TD> <TABLE WIDTH="600" CELLSPACING="0" CELLPADDING="0" BORDER="0"> <TD COLSPAN="6" WIDTH=600 ALIGN="CENTER" BGCOLOR="WHITE" VALIGN="MIDDLE"><IMG SRC="../images/logo1.gif" WIDTH=275 HEIGHT=81 ALT="" BORDER="0"></TD> </TR> <TR> <TD ALIGN="CENTER" BGCOLOR="#033467"><A HREF="../index.cfm" onMouseOver="imgOn('img1')" onMouseOut="imgOff('img1')"><IMG SRC="../images/home.gif" WIDTH=56 HEIGHT=17 ALT="" BORDER="0" NAME="img1"></A></TD> <TD ALIGN="CENTER" BGCOLOR="#294F33"><A HREF="../BackOffice/backoffice.cfm" onMouseOver="imgOn('img3')" onMouseOut="imgOff('img3')"><IMG SRC="../images/backoffice.gif" WIDTH=94 HEIGHT=17 ALT="" BORDER="0" NAME="img3"></A></TD> <TD ALIGN="CENTER" BGCOLOR="#706226"><A HREF="../Compliance/compliance.cfm" onMouseOver="imgOn('img5')" onMouseOut="imgOff('img5')"><IMG SRC="../images/compliance.gif" WIDTH=96 HEIGHT=17 ALT="" BORDER="0" NAME="img5"></A></TD> <TD ALIGN="CENTER" BGCOLOR="#5C2667"><A HREF="../Organization/organization.cfm" onMouseOver="imgOn('img4')" onMouseOut="imgOff('img4')"><IMG SRC="../images/gettingstarted.gif" WIDTH=122 HEIGHT=17 ALT="" BORDER="0" NAME="img4"></A></TD> <TD ALIGN="CENTER" BGCOLOR="#2A5C60"><A HREF="../Investment/investment.cfm" onMouseOver="imgOn('img6')" onMouseOut="imgOff('img6')"><IMG SRC="../images/investing.gif" WIDTH=146 HEIGHT=17 ALT="" BORDER="0" NAME="img6"></A></TD> <TD ALIGN="CENTER" BGCOLOR="#702A37"><A HREF="../Marketing/marketing.cfm" onMouseOver="imgOn('img2')" onMouseOut="imgOff('img2')"><IMG SRC="../images/marketing.gif" WIDTH=86 HEIGHT=17 ALT="" BORDER="0" NAME="img2"></A></TD> </TR> </TABLE> <TABLE WIDTH="600" HEIGHT="350" CELLSPACING="0" CELLPADDING="10" BORDER="0"> <TR><TD VALIGN="TOP"><FONT SIZE="2" FACE="ARIAL"><DIV ALIGN="JUSTIFY"> <TABLE BORDER=0 WIDTH="200" CELLSPACING="0" CELLPADDING="5" VALIGN="TOP" ALIGN="LEFT"> <TR> <TD BGCOLOR="#8BA184"> <FONT SIZE="2" FACE="Arial" STYLE="font-size: 8.5pt; font-family: verdana" COLOR="MAROON"><B><U> LAWS & RULES</U></B></FONT><P><FONT SIZE="1" COLOR="WHITE" FACE="ARIAL"> <FONT SIZE="2"><B>-</B></FONT> <a href="201.cfm"><FONT COLOR="WHITE">201. Findings</a></font> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="202.cfm"><FONT COLOR="WHITE">202. Definitions</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="203.cfm"><FONT COLOR="WHITE">203. Registration of Investment <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Advisers</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="203A.cfm"><FONT COLOR="WHITE">203A. State and Federal</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="204.cfm"><FONT COLOR="WHITE">204. Annual and Other Reports</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="204A.cfm"><FONT COLOR="WHITE">204A. Prevention of Misuse of <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Nonpublic Information</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="205.cfm"><FONT COLOR="WHITE">205. Investment Advisory <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Contracts</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="206.cfm"><FONT COLOR="WHITE">206. Prohibited Transactions by <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Investment Advisers</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="206a.cfm"><FONT COLOR="WHITE">206A. Exemptions</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="207.cfm"><FONT COLOR="WHITE">207. Material Misstatements</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="208.cfm"><FONT COLOR="WHITE">208. General Prohibitions</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="209.cfm"><FONT COLOR="WHITE">209. Enforcement of Title</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="210.cfm"><FONT COLOR="WHITE">210. Publicity</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="211.cfm"><FONT COLOR="WHITE">211. Rules, Regulations and <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Orders</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="212.cfm"><FONT COLOR="WHITE">212. Hearings</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="213.cfm"><FONT COLOR="WHITE">213. Court Review of Orders</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="214.cfm"><FONT COLOR="WHITE">214. Jurisdiction of Offenses <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>and Suits</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="215.cfm"><FONT COLOR="WHITE">215. Validity of Contracts</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="216.cfm"><FONT COLOR="WHITE">216. Annual Reports of <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Commission</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="217.cfm"><FONT COLOR="WHITE">217. Penalties</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="218.cfm"><FONT COLOR="WHITE">218. Hiring and Leasing Authority<BR><font <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>of the Commission</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="219.cfm"><FONT COLOR="WHITE">219. Separability of Provisions</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="220.cfm"><FONT COLOR="WHITE">220. Short Title</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="221.cfm"><FONT COLOR="WHITE">221. Effective Date</font></a> <BR><FONT SIZE="2"><B>-</B></FONT> <a href="222.cfm"><FONT COLOR="WHITE">222. State Regulation of <BR><font color="#8BA184" SIZE="2"> <B>-</B> </FONT>Investment Advisers</font></a> </TD> <TD BGCOLOR="WHITE" WIDTH="1"><FONT SIZE="1" COLOR="white">.</FONT><TD> </TR> </table> <br><FONT SIZE="3"><B>   Rule 206(4)-2   </B></FONT>   <H3>Custody or Possession of Funds or Securities of Clients</H3> <P> (a) It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 206(4) of the Act [15 U.S.C. 80b-6(4)] for any investment adviser registered or required to be registered under section 203 of the Act [15 U.S.C. 80b-3] who has custody or possession of any funds or securities in which any client has any beneficial interest, to do any act or take any action, directly or indirectly, with respect to any such funds or securities, unless: <P><DL><DD> (1) All such securities of each such client are segregated, marked to identify the particular client who has the beneficial interest therein, and held in safekeeping in some place reasonably free from risk of destruction or other loss; and <P><DD> (2) (A) all such funds of such clients are deposited in one or more bank accounts which contain only clients' funds, (B) such account or accounts are maintained in the name of the investment adviser as agent or trustee for such clients, and (C) the investment adviser maintains a separate record for each such account which shows the name and address of the bank where such account is maintained, the dates and amounts of deposits in and withdrawals from such account, and the exact amount of each client's beneficial interest in such account; and <P><DD> (3) Such investment adviser, immediately after accepting custody or possession of such funds or securities from any client, notifies such client in writing of the place and manner in which such funds and securities will be maintained, and thereafter, if and when there is any change in the place or manner in which such funds or securities are being maintained, gives each such client written notice thereof; and <P><DD> (4) Such investment adviser sends to each client, not less frequently than once every 3 months, an itemized statement showing the funds and securities in the custody or possession of the investment adviser at the end of such period, and all debits, credits and transactions in such client's account during such period; and <P><DD> (5) All such funds and securities of clients are verified by actual examination at least once during each calendar year by an independent public accountant at a time which shall be chosen by such accountant without prior notice to the investment adviser. A certificate of such accountant stating that he has made an examination of such funds and securities, and describing the nature and extent of such examination, shall be filed with the Commission promptly after each such examination. <P></DL> (b) This rule shall not apply to an investment adviser also registered as a broker-dealer under section 15 of the Securities Exchange Act of 1934 if (1) such broker-dealer is subject to and in compliance with Rule 15c3-1 [Reg. §240.15c3-1] under the Securities Exchange Act of 1934, or (2) such broker-dealer is a member of an exchange whose members are exempt from Rule 15c3-1 [Reg. §240.15c3-1] under the provisions of paragraph (b)(2) thereof, and such broker-dealer is in compliance with all rules and settled practices of such exchange imposing requirements with respect to financial responsibility and the segregation of funds or securities carried for the account of customers. <P>   </FONT></DIV> </TD></TR></TABLE> <P><BR><P><CENTER><FONT SIZE="1" COLOR="BLACK" FACE="ARIAL"> <A HREF="../Procedures/Procedures.cfm">COMPLIANCE PROCEDURES</A> | <A HREF="../Org_Documents/org_doc.cfm">ORGANIZATIONAL DOCUMENTS</A> | <A HREF="../Agreements/Agreements.cfm">SAMPLE AGREEMENTS</A> <BR><A HREF="../forms/forms.cfm">FORMS</A> | <A HREF="../Laws/laws_rules.cfm">LAWS & RULES</A> | <A HREF="../Links/vendor_links.cfm">VENDOR LINKS</A> | <A HREF="../govtlinks/government_links.cfm">GOVERNMENT LINKS</A> | <A HREF="../Links/other_links.cfm">OTHER LINKS</A> </FONT></CENTER> </TD></TR></TABLE> <TABLE WIDTH="600"><TR><TD> <CENTER><FONT SIZE="1" FACE="Arial" STYLE="font-size: 10px;" COLOR="Black">Copyright © 1999 moneymanagerservices.com. 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