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4.3 Custody of Client Accounts

<< Title IV Overview

4.3 Custody of Client Accounts

 

 


4.3.       Custody of Client Accounts.  Registered investment advisers shall be required to take such steps to safeguard client assets over which such adviser has custody, including, without limitation, verification of the assets by an independent public accountant, as the SEC may require by regulation. [§411]  In addition, the Comptroller General is required to conduct a study on the additional costs that would be incurred if SEC Rule 206(4)-2 subsection (b)(6) were eliminated – subsection (b)(6) currently provides an exception from the otherwise-required annual independent verification of the assets in a client's account where a related person to the adviser has custody of the client's assets, but such related person is operationally independent of the adviser. [§412]  The results of such study stating the costs of eliminating the exception shall be submitted to Congress within 3 years of the date of enactment of the Act.