3e. IA - Custody: Traps for the Unwary (Basic - OPEN)
The current Custody rule was adopted in 2010, and since then, there has been important staff guidance, concerning standing letters of authorization in 2017. Nevertheless, the application of the rule involves significant traps for the wary. This session will focus on current staff guidance and real-life examples based on results from SEC examinations. Emphasis will be placed on actions that the Compliance function might undertake to confirm compliance with custody requirements as part of its annual review and otherwise.
This session is open to regulators but closed to members of the press.
Learning Objectives:
Discuss measures to determine compliance with staff guidance regarding letters of authorization.
Consider steps to avoid inadvertent custody due to the terms of the custodial agreement.
Analyze custody issues that may arise from securities that transact other than “delivery versus payment.”
Learn about the implications of an adviser’s fiduciary duties in the context of custodial arrangements.
Hear about custodial arrangements for crypto assets, loans, privately offered securities, and other assets for which a traditional custodian may not be available.
