Investment Management

Impact of Recent Amendments to SEC’s Custody Rule

By: Irwin M. Latner, Patrick D. Sweeney
Herrick, Feinstein LLP, New York, New York, USA

In the wake of the recent frauds and scandals in the investment management industry, the SEC has amended its custody rule (Rule 206(4)-2) under the Investment Advisers Act of 1940. The new rules apply to all investment advisers (including hedge fund managers) who are registered with the SEC. These rules are intended to encourage the use of independent custodians and to deter fraudulent conduct and misuse of assets by advisers with control over client assets. Click here to read the entire alert.

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