Are transfer agents qualified custodians?
80a-5(a)(1)) (“mutual fund”), you may use the mutual fund’s transfer agent in lieu of a qualified custodian for purposes of complying with paragraph (a) of this section.
What does it mean to have custody of client assets?
The purpose of the Custody Rule is to provide protection for client funds or securities (“Client Assets”) against the possibility of “being lost, misused, misappropriated or subject to investment advisers’ financial reverses, including insolvency.”1 Under the Custody Rule, it is a “fraudulent, deceptive, or …
Which of the following is not a qualified custodian under nasaa rules?
Which of the following is NOT a qualified custodian under NASAA rules? The best answer is D. – Foreign financial institutions holding financial assets for customers.
What makes a qualified custodian?
The term “qualified custodians” is a legal one, defined by the SEC as a bank, broker-dealer, futures commission merchant or other entity that maintains client funds and securities in specific ways. The federal regulator can designate an entity as a qualified custodian, while state-level regulators typically cannot.
What is an ADV E?
Form ADV-E is used as a cover page for a certificate of accounting of securities and funds of which the investment adviser has custody (surprise exam report). Form ADV-E contains both information about the adviser and the surprise exam conducted.
What is a surprise examination?
A surprise examination requires procedures such as, but not limited to, the examination of certain books and records that relate to the adviser’s custody and confirmation with both the qualified custodians and clients.
Does a custodian have legal title?
Custodian appointment documents are required where fund trustees are practically unable to hold legal title to fund assets. The starting point at general law is that legal title to fund assets must generally be held in name of the current trustees of the fund.
What are the new SEC rules for custody?
Given that advisors like us are deemed to have custody, other SEC rules now get applied to such advisors. For firms that actually have real custody the SEC requires an annual surprise examination to make sure that client funds are safe and have not been embezzled.
When do SEC rules 138 and 139 apply?
Rules 138 and 139 by their terms only apply to an issuer that proposes to file, has filed, or has an effective registration statement. Moreover, the SEC has provided no guidance as to when the issuance of research reports on a company whose securities are being offered pursuant to a Rule 144A offering is permissible.
When is the compliance date for the custody rule?
A: The compliance date is March 12, 2010. Accordingly, qualified custodians must deliver account statements for all periods ending on or after March 12, 2010. Thus, quarterly statements ending on March 31, 2010, must be sent by qualified custodians directly to clients.
When was the most recent amendment to the custody rule made?
The adopting release for the most recent amendments to the rule (dated December 30, 2009, the “Adopting Release”) can be found at: http://www.sec.gov/rules/final/2009/ia-2968.pdf. These responses supersede the previously posted responses to questions regarding the 2003 amendments to the rule.