CHAPTER V

Custodianship and Recordkeeping

Sec. 34. Custodians and Sub-Custodians. –

(a) A registered investment company shall place and maintain its securities and similar investments and its funds in the custody of a bank or such other categories of persons as the Commission may designate by rule as qualifying to act as a custodian.  All custodians for registered investment companies shall satisfy the requirements prescribed by the Commission by rule, regulation or order.

(b) Sub-custodians may be appointed to act as custodian for a registered investment company’s foreign securities, similar investments and funds on the basis prescribed by rule, regulation or order.

Sec. 35. Auditors. –

(a) The financial statements of every registered investment company that are required or permitted to be audited by this Act or the rules or regulations of the Commission shall be audited and certified by an independent certified public accountant appointed by the investment company.

(b) A registered investment company shall appoint, may remove at any time, and shall select a successor to fill a vacancy caused by death, resignation or removal, an independent certified public accountant by a majority vote of its directors who are disinterested persons. 

(c) The term of engagement of an independent certified public accountant shall not exceed two years.

Sec. 36. Recordkeeping. –

 (a) A registered investment company and its investment advisers, administrative managers, principal distributors and principal underwriters shall maintain and preserve all records of the investment company or pertaining to actions or transactions by, for or on behalf of the investment company, for a period of six years, the most recent two years in a readily accessible place, or for such other periods as the Commission may prescribe by rule.

(b) All records maintained and preserved pursuant to Subsection (a) shall be open to periodic or special examination and copying by the Commission during regular business hours.

(c) It shall be unlawful for any person, except as permitted by rule, regulation or order of the Commission, to willfully destroy, mutilate or alter any record that is required to be preserved by Subsection (a).

 (d) For purposes of this Section, the term “records” refers to accounts, books, correspondence, memoranda, tapes, discs, papers, books and other documents or transcribed information of any type, whether written or electronic in character.

Back        Top        Next