NAC90.390. Minimum net capital or tangible net worth; submission of certificate of accountant.

     1. Unless he or she is exempt from registration under the Investment Advisers Act of 1940, an investment adviser who is not registered under that Act, and who takes or retains custody of securities or money of a client, shall:

     (a) Maintain net capital of not less than $20,000 or a tangible net worth of not less than $35,000; and

     (b) Promptly submit to the Office of the Administrator a copy of the certificate of an accountant that is required to be filed with the Securities and Exchange Commission pursuant to 17 C.F.R. § 275.206(4)-2.

     2. As used in subsection 1, “tangible net worth” means the net worth of the investment adviser, reduced by the total of:

     (a) Prepaid expenses, except items properly classified as current assets under generally accepted accounting principles;

     (b) Deferred charges;

     (c) The value of his or her intangible assets, including goodwill, franchises, organizational expenses, and unamortized debt discount and expense;

     (d) In the case of a natural person, the value of his or her personal property which is not readily marketable and the fair market value of his or her homes, furnishings and automobiles, less any indebtedness secured by such property, to the extent that the indebtedness is not greater than the carrying value of the property;

     (e) In the case of a corporation, advances or loans to stockholders or officers; and

     (f) In the case of a partnership, advances or loans to partners.

     3. An investment adviser who has a principal place of business in a state other than this State shall maintain only such minimum capital as is required by the state in which the adviser maintains his or her principal place of business, if the investment adviser is licensed in that state and is in compliance with that state’s requirements for minimum capital.

     (Added to NAC by Sec’y of State, eff. 4-22-88; A 10-16-89; 10-30-97; R016-02, 8-6-2002)