What constitutes custody status for registered investment advisers still creates challenges for firms despite the SEC’s best efforts to modify and clarify the rules. Amy Lynch, Founder and President, states that the custody rule is the regulatory issue the SEC has provided the most clarity on. However, she adds that it remains confusing for advisers since the rule contains substantial legalize that may have various interpretations and can therefore lead to rule violations. Recent SEC settlements with firms in the past year seem to bear that out. See InvestmentNews, “Custody status continues to perplex RIAs“
