Compliance Solutions for Investment Advisers

Category Archives: Custody

7 Things Advisers Must Do To Avoid Custody

A recent SEC No-Action Letter (Investment Adviser Association, February 21, 2017) clarified how an investment adviser can avoid having custody as a result of having a standing letter of instruction or other similar asset transfer authorization arrangement established by a client with a qualified custodian (SLOA).

SEC Issues Guidance Re: Inadvertent Custody

Maybe there is something wrong with a rule that needs continual guidance? See the latest SEC Investment Management Guidance:  Inadvertent Custody: Advisory Contract Versus Custodial Contract Authority

Top 3 Custody Deficiencies

As stated in the recent SEC Risk Alert, the 3 most frequent custody issues identified in examinations of investment advisers are as follows:

Important Lessons for SEC Advisers

Sometimes investment advisers busted by the SEC for intentional actions can offer lessons for their more law-abiding brethren. Two actions against investment advisers and certain of their executives are a case in point. One firm allegedly engaged in thousands of principal transactions through an affiliated brokerage firm without informing their clients. The other firm and

SEC Exams – Update #2

During this recent spate of exams, the SEC is really drilling down on custody.

Policy Statement on Custody Requirements

In conjunction with the release of a preliminary report describing an initiative by the Registration, Inspections, Compliance and Examinations Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth (the “Division”) to examine advisers that registered with the Commonwealth as a result of the Dodd-Frank Act (“Switch Advisers”), the Division issued a policy

SEC Charges Three Firms With Violating Custody Rule

 The Securities and Exchange Commission today sanctioned three SEC-registered investment advisory firms for violating the “custody rule” that requires them to meet certain standards when maintaining custody of their clients’ funds or securities. SEC investigations following referrals by agency examiners found that New York-based Further Lane Asset Management, Massachusetts-based GW & Wade, and Minneapolis-based Knelman

No Surprise Exams for Most SEC Advisers

Most of the investment advisers registered with the SEC who maintain custody of their clients’ investment funds aren’t subject to surprise annual examinations, according to a new federal report. A study released last Monday by the Government Accountability Office found that, as of April 1, 4,446 of the 9,982 SEC-registered advisers had control over client money,

SEC Risk Alert – Custody

The alert by the SEC’s Office of Compliance Inspections and Examinations (OCIE) comes after a review of recent examinations where significant deficiencies were identified showed custody-related issues in about one-third of the firms examined. The advisers’ deficiencies included: Failure to recognize that they have custody, such as situations where the adviser serves as trustee, is