Amendments to Rule 206(4)-2 of the Investment Advisers Act of 1940, the Custody Rule, adopted in 2010, were designed to provide expanded safeguards for clients of investment advisers. Among these amendments to the Custody Rule is a provision that requires advisors to undergo annual surprise examinations when they are deemed to have custody of client funds or securities. The surprise examination must be conducted by an accounting firm registered with, and subject to examination by, the Public Company Accounting Oversight Board and must take place annually.
Despite many years of implementation, the amendments, including the surprise exam requirement, continue to raise questions and cause confusion for investment advisors.
The Investment Management Group at BBD has performed many surprise custody examinations under these rules of the Investment Advisers Act of 1940 as well as similar examinations under Rule 206(4) of the Investment Advisers Act of 1940 and Rules 17f-1 and 17f-2 of the Investment Company Act of 1940. We have the experience and expertise to help you comply with your requirements.
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