Should [the Commission] require that all client funds and securities be maintained with qualified custodians?
NASAA supports advisers using entities other than the adviser itself to hold client funds and securities. We do have concerns that there may be situations where obtaining an unaffiliated custodian would pose potential difficulties, such as an adviser not affiliated with a broker-dealer that does not do a lot of trading. Any exceptions to using a qualified custodian should be clearly and narrowly defined to provide the best investor protections. Should the term ” foreign financial institution” be defined or qualified? “Qualified custodian” as defined in proposed section 206(4)-2(c)(3) includes the term “certain foreign financial institutions.” However these entities do not appear to be defined in the proposed section. In the absence of a specific definition or qualifications for a “foreign financial institution” that is acting as a qualified custodian, we are concerned with the inability of regulators to examine and obtain documents held by financial institutions that are protected by f
Related Questions
- If an adviser manages client assets that are not funds or securities, does the amended custody rule require the adviser to maintain these assets with a qualified custodian?
- An attorney who maintained an IOLA account has died. What should be done about the client funds that are still in the account?
- What does the rule require of lawyers and law firms who handle client funds?
