The Custody Rule Revisited
Articles by: Richey May, Jun 05, 2015
The Custody Rule (Rule 206(4)-2) requires that advisors custody client funds and securities with a qualified custodian. Advisors must notify their clients that they are doing so and identify who the custodian is, and must ensure that the custodian is sending at least quarterly statements to clients. They also need to verify the funds and securities held in custody by having an independent, surprise examination conducted annually by a Public Company Accounting Oversight Board (PCAOB) registered public accounting firm.