1	The Commission's website contains a page (http://www.sec.gov/divisions/investment/iard/iastuff.shtml) with links to both the Advisers Act and the rules thereunder. [Webmaster's note: footnote updated July 5, 2001.]
2	Section 204 of the Advisers Act requires investment advisers to produce the books and records required under the Advisers Act upon the request of the Commission's examination staff.
3	The comments outlined in this letter represent the views of the staff and are not necessarily those of the Commission. The information in this letter should not be used as a substitute for the Advisers Act and related rules, forms, instructions to the forms, no-action letters, interpretive letters, and releases, all of which are publicly available. Of course, this letter does not discuss all provisions of the Advisers Act and the rules thereunder with which advisers must comply. In addition, this letter is not intended to provide legal advice. You should direct all questions regarding specific aspects of your advisory business to legal counsel. [Webmaster's note: footnote updated November 28, 2001.]
4	See S.E.C. v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 191-192 (1963).
5	Among other required Commission filings, each Commission-registered investment adviser must indicate whether it remains eligible for Commission registration within 90 days of the end of its fiscal year by completing and filing Part 1A, Item 2 of Form ADV (Rule 204-1(a)(1) under the Advisers Act). [Webmaster's note: footnote updated July 10, 2001.]
6	Form ADV, Part II, Item D.
7	Form ADV, Part 1A, Schedules A and B, and Section 10 of Schedule D. Form ADV, Part II, Items 8 and 9. [Webmasters' note: footnote updated July 10, 2001.]
8	Rule 206(4)-4(a)(1) under the Advisers Act.
9	See Section 206 of the Advisers Act.
10	See In re F. W. Thompson Company, Ltd., Advisers Act Release No. 1895 (Sept. 7, 2000). [Webmaster's note: footnote added November 28, 2001.]
11	See In re James L. Foster, Laurie F. Foster, Steven M. Bolla, and William E. Busacker, Jr., Admin. Proc. File No. 3-10236 (June 20, 2000). [Webmaster's note: footnote added November 28, 2001.]
12	Section 206 of the Advisers Act and Rule 206(4)-1 thereunder.
13	Rule 206(4)-1(a)(1) under the Advisers Act.
14	Section 208(a) of the Advisers Act.
15	See Mandell Financial Group, SEC no-action letter (pub. avail. May 21, 1997).
16	Rule 206(4)-1(a)(2) under the Advisers Act.
17	Rule 206(4)-1(a)(3) under the Advisers Act.
18	Rule 206(4)-1(a)(4) under the Advisers Act.
19	Section 206 of the Advisers Act and Rule 206(4)-1(a)(5) thereunder.
20	See Valicenti Advisory Services, Inc. v. SEC, 198 F.3d 62 (2d Cir.1999).
21	See Covator/Lipsitz, Inc. (pub. avail. Oct. 23, 1981) and Anametrics Investment Management (pub. avail. May 5, 1977), SEC no-action letters.
22	See, e.g., Clover Capital Management, Inc., SEC no-action letter (pub. avail. Oct. 28, 1986). See also In the Matter of LBS Capital Management, Inc., Advisers Act Release No. 1644 (July 18, 1997).
23	See Investment Company Institute, SEC no-action letter (pub. avail. Aug. 24, 1987).
24	See Great Lakes Advisors, Inc., SEC no-action letter (pub. avail. Apr. 3, 1992).
25	Rule 204-2(a)(16) under the Advisers Act requires advisers to maintain "all accounts, books, internal working papers, and any other records or documents that are necessary to form the basis for or demonstrate the calculation of the performance or rate of return used in advertisements."
26	Section 206 of the Advisers Act.
27	See In the Matter of Roger W. Honour, Advisers Act Release No. 1527 (Sept. 29, 1995). See also In the Matter of John J. Kaweske, Advisers Act Release No. 1539 (Nov. 27, 1995).
28	Rule 204-2(a)(12) under the Advisers Act.
29	Section 206 of the Advisers Act.
30	Rule 204-2 under the Advisers Act identifies the books and records that are required to be made and kept. Paragraph (e) of this rule states that certain of these books and records must be "maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on records, the first two years in an appropriate office of the investment adviser."
31	Paragraphs (e) through (g) of Rule 204-2 under the Advisers Act clarify the manner, location, length of time, and medium by which books and records must be maintained and preserved.
32	Rules 204-2(a)(10) and (15) and 206(4)-3 under the Advisers Act.
33	Form ADV, Part II, Items 8 and 12.
34	Section 206 of the Advisers Act. See also In re Mark Bailey, Advisers Act Release No. 1105 (Feb. 24, 1988).
35	For an extensive discussion of soft dollar examination findings, see Office of Compliance Inspections and Examinations, Inspection Report on the Soft Dollar Practices of Broker-Dealers, Investment Advisers and Mutual Funds, (Sept. 22, 1998). This report is available on the Commission's website at http://www.sec.gov/news/studies/softdolr.htm.
36	Rule 206(4)-2 under the Advisers Act.
37	See Advisers Act Release No. 1000. See also Melville G. MacKay, SEC no-action letter, (pub. avail. May 27, 1977).
38	See John B. Kennedy (pub. avail. June 5, 1996); Blum Shapiro Financial Services, Inc. (pub. avail. April 16, 1993); Seth C. Warner & Co. (pub. avail. April 18, 1985); Crocker Investment Mgmt. Corp. (pub. avail. April 14, 1978); and PIMS, Inc. (pub. avail. Oct. 21, 1991), SEC no-action letters. Advisers that are also registered broker-dealers are exempted from the custody rule provided that the broker-dealer is complying with the net capital requirements under the Securities Exchange Act of 1934 (Rule 206(4)-2(b) under the Advisers Act).
39	Among other things, the staff will confirm that the accountants performing the annual funds and securities verification and filing Form ADV-E (Rule 206(4)-2(a)(5) and Schedule G (Form ADV, Part II, Item 14) have followed all requirements adopted by the Independence Standards Board ("ISB") for Auditors.
40	Section 203(e)(6) of the Advisers Act.