SEC Will Consider This Week: New Controls for Registered Investment Advisers with Custody

May 13, 2009

In a speech to the Investment Company Institute last week, the Chairman of the U.S. Securities and Exchange Commission (“SEC”), Mary Schapiro, noted that “[n]ext week [the SEC] will consider rule proposals for significant enhancements to controls around investment adviser custody of customer assets, to reduce dramatically the possibility that frauds like Madoff might happen again at a registered broker-dealer or investment adviser.”

Based upon this speech and other public comments by SEC Chairman Schapiro, RIA Compliance Consultants presumes that the SEC will be considering this week proposals to require registered investment advisers to undergo a surprise audit as to custody of client assets, to complete a third-party compliance audit, and to certify through a senior executive the adequacy of the registered investment adviser’s internal controls.

Once the SEC announces these proposed investment adviser rules, RIA Compliance Consultants will provide a detailed analysis to its readers.

Posted by Bryan Hill
Labels: Custody, SEC, Third-Party Compliance Audit