New SEC Custody Rules for Investment Advisers

Implementing Effective Compliance Policies and Procedures to Avoid SEC Penalties and Sanctions

SEC amendments effective March 12; New FAQs released March 10

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, March 25, 2010

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will analyze the SEC’s new custody rules for investment advisers, discuss key compliance requirements, and provide best practices for developing effective compliance programs.


The SEC recently issued sweeping amendments to the custody rules under the Investment Advisers Act intended to strengthen requirements for safekeeping of client assets. The new rules encourage the use of independent custodians and impose additional controls on registered investment advisers (RIAs).

Advisers must undergo an annual surprise examination by an independent public accountant to verify client assets. There are additional disclosure and recordkeeping requirements. The rules provide guidance on policies and procedures that advisers should adopt as part of their compliance programs.

The new rules are complex and have significant associated costs, especially to smaller adviser groups. Counsel for investment advisers must carefully consider these compliance issues in structuring advisory relationships and reviewing existing compliance programs.

Listen as our authoritative panel of financial services attorneys discusses the SEC’s new custody rules for investment advisers, how these rules affect compliance programs and what investment advisers need to do to achieve compliance.



  1. Overview of new custody rules
    1. Surprised examination
      1. Impact on smaller RIAs
      2. Impact on pooled investment vehicles
      3. Agreement with the accounting firm
    2. Delivery of account statement and notice
    3. Internal control report — SAS-70
    4. Related persons
    5. Fee-only RIAs
  2. Compliance policies and procedures
    1. Background checks for employees with access to accounts
    2. Checks and balances for movement of assets and account updates
    3. Checks and balances for employee access to assets
    4. Controls for employee who acquire custody of client accounts
    5. Segregation of duties of advisory personnel from custodial personnel
    6. Internal reporting requirements
    7. Books and records rule
    8. Amendments to SEC forms

    III. SEC enforcement trends


The panel will review these and other key questions:

  • How has the surprise examination requirement been expanded?
  • Are "fee-only RIAs" required to undergo a surprise examination?
  • What is the role of the SAS-70 report?
  • What is the impact of the new rules on pooled investment vehicles?
  • What guidance does the SEC provide for compliance policies and procedures?


Daphne Tippens Chisolm
Daphne Tippens Chisolm

Law Offices of DT Chisolm

She counsels small and large registered investment advisers to ensure compliance with the Investment Advisers Act. She...  |  Read More

Fiona A. Philip
Fiona A. Philip


She represents corporations and their officers, directors and employees in government proceedings before the SEC, DOJ,...  |  Read More

Dilia M. Caballero
Dilia M. Caballero
Associate General Counsel
E*Trade Financial

She is a member of the Brokerage Legal Department at E*TRADE FINANCIAL Corp. and provides advice regarding the...  |  Read More

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