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Schiff Hardin LLP
Securities and Futures Regulation Alert

Recent Amendments to the Rule 206(4)-2 under the Investment Advisers Act of 1940

On December 30, 2009, the Securities and Exchange Commission (the "SEC") adopted amendments to Rule 206(4)-2 under the Investment Advisers Act of 1940, as amended (the "Custody Rule"). The amendments to the Custody Rule originally were proposed earlier in 2009 largely as a response to the Ponzi scheme orchestrated by Bernard Madoff and other fraudulent investment schemes that had come to light in 2008 and early 2009. Among other features, the amendments to the Custody Rule are intended to provide additional safeguards for client funds or securities that are deemed to be in the custody of a registered investment adviser by closing certain exemptions which had previously existed under the Custody Rule.

Schiff Hardin's Securities and Futures Regulation Group has prepared a summary of several of the key provisions of the amendments to the Custody Rule.

Click here for a printable version of the summary (PDF).

For questions regarding the topics addressed in this Alert, please contact any of the attorneys in Schiff Hardin's Securities and Futures Regulation Group.

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