SEC Adviser Exams Find Widespread Violations of Custody Rule

The SEC’s Office of Compliance Inspections and Examinations reports finding widespread compliance deficiencies related to custody of securities. In its March 4, 2013 National Exam Program Risk Alert, OCIE said that approximately one third of its examinations of registered investment advisers revealed significant deficiencies.

As a result of these findings, OCIE referred violations to the SEC’s Division of Enforcement where appropriate.


OCIE previously identified compliance with Rule 206(4)-2 under the Advisers Act (the “Custody Rule”) as a priority area for purposes of its National Exam Program (NEP) (see our recent client alert regarding 2013 examination priorities). Nonetheless, recent NEP compliance examinations uncovered “widespread and varied” compliance deficiencies, which it grouped into four general categories...

Please see full alert below for more information.

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Topics:  Audits, Custody Rule, Customer Funds Protection, Investment Adviser, Investors, NEP, SEC

Published In: Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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