ComplianceAlert

IM Issues New Guidance on Adviser Custody

The SEC’s Division of Investment Management (IM) just issued new guidance on the Custody Rule 206(4)-2. Most likely this new guidance is a result of the special custody exams conducted by OCIE in 2016. It appears that the examination Staff observed several instances of inadvertent custody via special arrangements between advisory clients and client custodians. Earlier this month, IM issued a no-action letter on the Custody Rule (see Investment Adviser Association, SEC No-Action letter, February

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ComplianceAlert

SEC Offers Rare Examination Insight

This week the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued its overview of investment adviser examination findings since February 2015. The Risk Alert is a rare disclosure of OCIE examination findings. Five of the most common examination deficiencies are discussed in the Alert. Violations to hit the top five (5) list are as follows: Rule 206(4)-7, the Compliance Rule Regulatory Filings, general Rule 206(4)-2, Custody Rule 204A-1, Code of Ethics Rule 204-2, Books…

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