Tag Archives: Surprise Custody

Clarification on Custody and SLOA Arrangements

On 21 February 2017, the SEC’s Division of Investment Management released a new no-action letter in relation to custody and standing letters of authorization (“SLOA”). The Investment Adviser Association (IAA) previously sent a letter to the Division requesting clarification that an investment adviser does not have custody as set forth in Advisers Act Rule 206(4)-2 (the “Custody Rule”) if it acts pursuant to a SLOA or other similar asset transfer authorization arrangement established by a client and qualified custodian. This letter also requested no-action relief under the Custody Rule and surprise custody examination as required by the Custody Rule. Continue reading Clarification on Custody and SLOA Arrangements

Is a firm deemed to have custody if they have the ability to move money from client accounts?

By Carrie Zippi, CPA

There continues to be limited guidance publicly, although the Securities and Exchange Commission (“SEC”) staff has raised questions during recent examinations about advisers having custody as a result of the money movement authorization level provided by clients. The SEC has focused on an arrangement where the adviser is authorized or permitted to withdraw client funds or securities upon the adviser’s instructions to the custodian. Continue reading Is a firm deemed to have custody if they have the ability to move money from client accounts?