Custody

Survey: Cybersecurity Again Hottest Compliance Topic, Custody Drops

Advisory firms nationwide continue to be highly concerned about cybersecurity, with approximately 83 percent of them naming it their highest compliance concern for the sixth year in a row. Concerns about custody compliance, however, are down from last year.

SEC Moves Custody Rule Reform to the Fast Track

The SEC plans to propose amendments that will reform the Custody Rule within the next 12 months. The rules reform will join agency plans to take other actions within that same time period, including changes to the Advertising Rule, long identified within the asset management community as needing reform, the Cash Solicitation Rule, the use of derivatives by investment companies, and fund of funds arrangements.

Custody Rule Reform: SEC Seeks Input on Non-DVP Practices, Digital Assets

The SEC staff, in what might be considered a prelude to reform of Advisers Act Rule 206(4)-2, the Custody Rule, on March 12 issued a public letter to the Investment Adviser Association seeking answers to questions involving a certain type of custodial practice, as well as questions related to custody of digital assets. Reform of the Rule is listed on the agencys long-term regulatory agenda, and the letter should be a welcome sign to those calling for the SEC to move forward.

Determine Auditors Custody Rule Savvy before Engagement

The Custody Rule can be a major headache for advisory firms and their legal counsel. It is complicated, open to interpretation, and the SEC is on the lookout for advisers - and accounting firms - that violate it. All the more reason, for both advisers and auditors to be knowledgeable and experienced about the Rule before taking steps that may violate its requirements.

Comprehensive Overhaul of Custody Rule Urged by IAA

The Investment Adviser Association wants the SEC to consider a comprehensive overhaul of Advisers Act Rule 206(4)-2, the Custody Rule, which would, among other things, limit the Rule to risks presented by actual physical custody. Other proposed changes included considering circumstances when surprise examinations might not be required, and excepting certain clients or services from the Rules requirements.

Inadvertent Custody: New FAQs Attempt to Clarify Enforcement

Sometimes a regulator articulates a new legal standard a bit too broadly, causing confusion among the regulated, and then seeks to clarify what it meant - only to cause still more confusion. Such may be the case with the Custody Rule and the SEC staff, which earlier this month issued two FAQs regarding the relatively new concept of "inadvertent custody."

Advertising and Custody Rule Reform on SECs Latest Regulatory Agenda

Its beginning to look like the next 12 months may be a period of wish fulfillment for advisers, funds and attorneys who have long called for the SEC to reform some of its existing Advisers Act rules, the Advertising Rule and the Custody Rule among them.

Fund Administrators that Fail to Act on Red Flags May Face Charges

Fund administrators should be under no illusion that if a fund runs into trouble, the administrator is somehow immune because it is not the fund, but simply provides services to it. Administrators have an obligation to watch for and act on red flags, particularly those that involve client assets.

Think You Dont Have Custody? Think Again

Some advisers may believe they dont have to comply with Rule 206(4)-2, the Custody Rule, because they do not possess client assets. Such a belief could get them in trouble, both with clients and with the SEC. Turns out there are at least five types of custody - and only three of them involve asset possession.

Custody Three Times: SEC Staff Provide Some Rule 206(4)-2 Answers

Few Advisers Act rules are as bedeviling to investment advisers as Rule 206(4)-2, the Custody Rule. In a welcome development, the SEC staff recently provided some clarity in regard to three topics that involve the Rule: standing letters of authorization (SLOAs), first-person transfers, and inadvertent custody.

Audio Interviews

How to Read an SEC Enforcement Action

Stern Tannenbaum law firm partner Aegis Frumento on how to get the most from reading an SEC administrative order or court complaint.

Most Important Supreme Court Decisions for Advisers and Funds

Find out the high court decisions from recent years that are likely to affect how advisers and investment companies work from Debevoise partner Robert Kaplan. 

Top 10 Cybersecurity Steps to Take Now

Sutherland law firm partner Brian Rubin shares the most urgent cybersecurity steps for investment advisers.

Top Marketing Problems … and Solutions

Get solutions for the top marketing challenges that advisers face from ACA Compliance Group managing director Kimberly Daly

Watch Out for 5 Cybersecurity Myths

ACA Aponix Director Pascal Busnel on the most common cybersecurity myths that may cause firms to spend resources where they may not be needed.

The Hidden Costs of Non-Compliance

Proskauer law firm partner and former SEC Division of Investment Management deputy director Robert Plaze on why the costs of non-compliance go way beyond an SEC penalty.

CCO Liability: How to Protect Yourself

Find out from Blue Edge Capital CCO Margaret Fretz what chief compliance officers may be liable for and best practices to make sure you are protected.

Ethics or Compliance: Making the Choice

Find out the difference an ethics, rather than a compliance, perspective makes at an advisory firm from former Ethics and Compliance Officer Association COO Timothy Mazur.