The Securities and Exchange Commission issued an order against Mark M. Wayne, the president, Chief Executive Officer, and Chief Compliance Officer of Freedom One Investment Advisors, Inc. for violations of the the custody rule under the Investment Advisers Act. Although that’s the headline, the SEC action shows many other compliance failures. First, the custody issues. … Read more »
Category: Custody
Updated Guidance on the Custody Rule for Private Funds
The Securities and Exchange Commission has provided some updated guidance on the Custody Rule for private funds. It has sometimes been tricky for private funds to comply with Rule 206(4)-2. The custody rule deems it to be a fraudulent, deceptive or manipulative act, practice or course of business for an adviser to have custody of … Read more »
The SEC Is Not Happy with Custody Compliance
The Securities and Exchange Commission issued a Risk Alert on compliance with its custody rule for investment advisers. Beyond the warning to investment advisers, it also issued an Investor Bulletin to protect advisory clients from theft or misuse of their funds and securities. After a review of recent examination, the SEC’s Office of Compliance Inspections … Read more »
2013 SEC Examination Priorities
The Securities Exchange Commission published its examination priorities for 2013. They cover a wide range of issues at financial institutions, including broker-dealers, clearing agencies, exchanges and self-regulatory organizations, investment companies, hedge funds and private equity funds, and transfer agents. The scope of an IA examination is “generally limited to the issues and business practices of … Read more »
Custody and Private Funds
Last year, the Securities and Exchange Commission put a new rule in place restricting an investment adviser’s ability to have custody of its clients’ assets. Given that many private fund managers are going to have to register as investment advisers they need to figure out how to comply with this rule. The rule is the … Read more »
More Information on the Custody Rule
With the removal of the 15 client rule exemption from registration with the SEC, many private funds are going to have to comply the custody rule Rule 206(4)-2. Private equity firms will have the most problems trying to meets the demands of the rule. The SEC is trying to help. They updated the Staff Responses … Read more »
Private Equity and the Custody Rule
With the impending removal of the 15 Client Rule exemption from registration with the SEC, I was scratching my head trying to figure how to make the SEC’s new custody rule work for private equity. The SEC recently updated its guidance on custody rule compliance truing to add clarity for advisers to pooled investment vehicles. … Read more »
Custody of Funds or Securities of Clients by Investment Advisers
The SEC released the final version of its new custody rule (.pdf). The Commissioners had announced their approval of the rule on December 17 and then released the final text on December 30. The rule goes into effect 60 days after publication in the Federal Register. The amendments are designed to provide additional safeguards under … Read more »
SEC Approves New Custody Rule
The Securities and Exchange Commission adopted the proposed Custody Rule for investment advisers originally proposed last May. (See: SEC Releases Proposed Custody Rules for Investment Advisers) As is typical with the SEC, they announced the rule was approved before they made the final version of rule available. The rule amendments will be effective 60 days … Read more »
SEC Releases Proposed Custody Rules for Investment Advisers
On May 14, the Securities Exchange Commission said they were proposing New Custody Rules for Investment Advisers. They summarized the proposed rules but did not release the actual text of the proposed rules. Now the proposed rules are available in Release No. IA-2876 (.pdf). Comments must be received on or before July 28, 2009. SUMMARY: … Read more »