AdvisersSEC

FYI: IAA FAQs on Adviser Custody

FYI: The Investment Adviser Association (IAA) has issued publicly available FAQs addressing SLOAs (Standing Letters of Authorization), transfers between client accounts and related matters under the Advisers Act custody rule. The IAA FAQs aim to address residual questions that existed in the aftermath of the SEC staff’s own custody FAQs issued on February 21, 2017, relating to those topics, and a custody no-action letter issued to the IAA that same day.

Advisers that are determined to have “custody” under SLOA, account transfer or similar arrangements must not only comply with the custody rule (which, depending on the circumstances, may require a surprise exam) and set up related compliance systems, but should also consider the need to report those assets as under the adviser’s “custody” on Form ADV. This puts custody once again “top of mind” for the many advisers that are in the midst of preparing their annual ADV update.

IAA FAQs on certain custody matters (December 19, 2017): https://higherlogicdownload.s3.amazonaws.com/INVESTMENTADVISER/aa03843e-7981-46b2-aa49-c572f2ddb7e8/UploadedImages/FAQs_Supplement_v1217a.pdf

SEC FAQs on custody (in particular Question II.4., last modified Feb. 21, 2017): https://www.sec.gov/divisions/investment/custody_faq_030510.htm

SEC no-action letter issued to the IAA addressing certain custody matters (February 21, 2017): https://www.sec.gov/divisions/investment/noaction/2017/investment-adviser-association-022117-206-4.htm

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