Institute Supports SEC Investment Adviser Rule Amendments Washington, DC, September 24, 2002 - The Institute supports amendments proposed by the SEC to rules governing custody of investment advisers in a recent comment letter. The Institute notes that, consistent with the Institute's previous recommendations, the proposed amendments would provide greater flexibility to advisers in connection with their custodial arrangements, and would eliminate confusion and inefficiencies in the current rule. The Institute also recommends several modifications to the proposed amendments, including: - that the definition of "custody" in the rule be consistent with longstanding staff interpretations of this term;
- expanding the types of assets that may be held by a foreign qualified custodian to include all funds and securities in the account of a client that is held outside of the U.S.; and
- that the delivery requirements applicable to account statements sent by the custodian be revised in order to conform them to current industry practice.
The Institute also seeks clarification that the one business day period within which any "finding" of a material discrepancy by an auditor must be reported to the Commission begins to run when the auditor, based upon a review of the facts and circumstances, which may include consulting with the adviser or ascertaining additional information, has reason to believe that a material discrepancy exists.
|
