Investment advisers who exercise limited authority over client assets may be able to avoid enforcement actions for failing to comply with a rule governing custody of customer funds (Investment Adviser Ass’n., SEC No-Action Letter, 2/21/2017).
Specifically, an adviser that has an asset transfer agreement with a client wouldn’t have to have an annual surprise examination, provided certain conditions are met, the SEC Division of Investment Management said.
Widespread Confusion.
The Investment Adviser Association asked the Securities and Exchange Commission staff to confirm that an adviser doesn’t have “custody” under the 1940 Investment Advisers Act if it acts pursuant to ...
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