Lawrence Cohen, Esq. Of Counsel.
Stark & Stark, a Professional Corporation (Offices in Lawrenceville and Cherry Hill, NJ and Philadelphia, PA)
Overview. In a development with consequences for both investment advisers and broker/dealers, on September 25, 2003, the SEC adopted amendments to Rule 206(4)-2, the "Custody Rule," under the Investment Advisers Act of 1940 ("Advisers Act"). The rule provides that advisers with custody of client securities or funds are required to implement controls to protect those client assets from being lost, misused, misappropriated, or otherwise subject to the adviser's financial problems. The amended rule is effective November 5, 2003 and the deadline for compliance is August 1, 2004.
