Earlier this year, the U.S. Securities and Exchange Commission (“SEC”) proposed new requirements for registered investment advisor firms that have custody of clients funds and securities. According to current SEC Rule 206(4)-2, Custody or Possession of Funds of Securities of Clients, custody is defined as “holding, directly or indirectly, client funds or securities, or having any authority to obtain possession of them. Custody includes –
Join Our Webinar – Auditing Investment Advisory Fee Calculations, Deductions & Refunds
September 21, 2009
NASAA President Calls for Raising AUM to $100 Million for SEC Registration of Investment Advisers
September 19, 2009
In a recent speech at the North American Securities Administrators Association (“NASAA“) annual conference, Texas Securities Commissioner, Denise Voigt Crawford who is the incoming NASAA President, revealed that the SEC might raise the asset under management (“AUM“) threshold for SEC registration of investment advisers from $25 million to $100 million, and NASAA supports such a change.
NASAA Urges SEC to Exclude from Surprise Audit RIAs with Custody Solely Due to Automatic Deduction of Fees
August 09, 2009
In response to the proposal by the U.S. Securities and Exchange Commission (“SEC”) to require federally registered investment advisers with custody of client funds or securities to undergo an annual surprise audit by an independent public accountant, the North American Securities Administrators Association (“NASAA”) surprisingly weighed in favor of the investment advisory industry.
Join RIA Compliance Consultants for its June 18, 2009 Webinar on the Proposed Changes to the SEC’s Custody Rule
June 06, 2009
Last month, the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to the custody rule under the Investment Advisers Act of 1940, which the SEC explained are designed to increase protections for investors who entrust their funds and securities to registered investment advisers. According to the proposed rule changes, all SEC registered investment advisers will be required to hire an accounting firm to perform an annual surprise audit. The SEC has stated that it believes the surprise accounting audits will impact approximately 9,600 of the approximately 11,000 SEC registered investment advisor firms. The surprise accounting audits would be far-reaching because they would apply to all investment advisory accounts of which the registered investment advisor has any form of custody, including the ability to deduct advisory fees.
According to a recent article in Investment News which quotes an official of the Financial Planning Association (“FPA”), the chairman of the U.S. Securities and Exchange Commission (“SEC”), Mary Schapiro, is backing off of her previously discussed, but never formerly considered by the SEC, proposal to require each federally registered investment adviser to engage a third-party to conduct an annual compliance audit of the investment adviser.
Background Information for RIAs Concerning SAS 70 Type II Audit Reports by PCAOB Accountants
May 16, 2009
In light of the recent proposal by the U.S. Securities and Exchange Commission (“SEC”) to require federally registered investment advisers, whose client assets are not held or controlled by a qualified custodian independent of the investment adviser, to obtain annually a SAS 70 Type II audit report from a PCAOB registered and inspected accountant, RIA Compliance Consultants thought it might be helpful to share some background information about this type of audit report and the PCAOB.
During an open meeting yesterday, the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to Rule 206(4)-2 which, according to the SEC, are designed to increase protections for investors who entrust their funds and securities to registered investment advisers.
The Securities and Exchange Commission (“SEC”) has announced that the Commission will consider whether to propose amendments to Rule 206(4)-2 under the Investment Advisers Act of 1940 during its open meeting scheduled for Thursday, May 14, 2009.
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.”
FPA Questions SEC’s Proposed Suprise Custody Audits, Third-Party Compliance Audits & Internal Controls for RIAs
May 05, 2009
In a recent letter to Mary Schapiro, Chairman of the U.S. Securities and Exchange Commission (“SEC”), the Financial Planning Association (“FPA”) questions SEC Chairman Schapiro’s potential changes to the custody rule for registered investment advisers, third-party compliance audits of registered investment advisers, and internal controls of registered investment advisers.
