A registered adviser who acts as custodian is subject to the following requirements:
(a) The custodian must be prepared for an unannounced annual audit by an independent public auditor to verify client assets being held;
(b) the custodian is required to send account statements directly to clients;
and (c) the custodian must obtain a report on the internal controls governing the custody of customer assets from an independent public accountant.
The rule cautions that it is a fraudulent, deceptive, or manipulative act for a registered adviser to maintain custody of client assets unless the adviser meets the requirements of the custody rule.
A registered adviser who acts as custodian is subject to the following requirements:
(a) The custodian must be prepared for an unannounced annual audit by an independent public auditor to verify client assets being held;
(b) the custodian is required to send account statements directly to clients;
and (c) the custodian must obtain a report on the internal controls governing the custody of customer assets from an independent public accountant.
The rule cautions that it is a fraudulent, deceptive, or manipulative act for a registered adviser to maintain custody of client assets unless the adviser meets the requirements of the custody rule.
A registered adviser who acts as custodian is subject to the following requirements:
(a) The custodian must be prepared for an unannounced annual audit by an independent public auditor to verify client assets being held;
(b) the custodian is required to send account statements directly to clients;
and (c) the custodian must obtain a report on the internal controls governing the custody of customer assets from an independent public accountant.
The rule cautions that it is a fraudulent, deceptive, or manipulative act for a registered adviser to maintain custody of client assets unless the adviser meets the requirements of the custody rule.