Three Advisory Firms Charged with Violating SEC Custody Rule
The Securities and Exchange Commission (SEC) rounded out a busy month of issuing enforcement actions by charging three investment advisory (IA) firms with violations of Section 206(4) and Rule 206(4)-2 of the Investment Advisers Act of 1940 (the “Custody Rule”). … Read More
Custody Considerations for Investment Advisers
Apr. 2013
Proposed Revisions to California’s Custody Rule
The California Department of Corporations (“DOC”) recently issued an invitation for comments regarding proposed amendments to the California investment adviser custody rule, which sets forth requirements for investment advisers with custody or possession of clients’ funds or securities. Investment adviser … Read More
Proposed Rule Would Increase SEC Oversight of Broker-Dealer Custody Practices
Rule 17a-5 under the Exchange Act requires broker-dealers to undergo an annual audit conducted by an independent public accountant and to file an annual report containing audited financial statements and certain supporting schedules with the SEC and the broker-dealer’s designated … Read More
Private Funds Balk at Proposed Changes to Custody Rule
The Investment Adviser Section of the North American Securities Administrators Association (NASAA) recently released proposed changes to the NASAA model investment adviser custody rule. The most controversial aspect of the model rule, as originally proposed, was the requirement that advisers … Read More
SEC Provides Relief from PCAOB Inspection Requirements for Auditors to Private Funds
Under Rule 206(4)-2 of the Advisers Act (the “Custody Rule”), investment advisers to one or more private funds are deemed to have custody of the assets in the fund and accordingly must implement certain procedures designed to protect those assets … Read More