US Regulator Adopts Amendments to Custody Advisers Rule

February 11, 2010

The Securities and Exchange Commission (SEC) recently adopted rule amendments that impose significant additional requirements on U.S. registered investment advisers deemed to have custody of client assets, including requirements that investment advisers that do not use an independent qualified custodian will have to undergo annual surprise examinations by independent accountants and obtain annual reports from such accountants assessing internal controls relating to the custody of client assets. This update examines the new rules, which are designed to strengthen the controls and safeguards over the custody and use of client assets by U.S. registered investment advisers and their affiliates.

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