It’s time to get compliant!
If you've become subject to the SEC surprise examination requirements, Plante Moran can help!
Has your client base or business model changed resulting in your firm being required to have a surprise custody examination? Has the Securities and Exchange Commission’s interpretation of the enhanced custody rule caused you to reconsider how your firm defines “custody”? Regardless of whether it’s a change in your business or the environment in which it operates, you can rely on the experience of the Plante Moran financial services team for help determining how the enhanced custody rule applies to your client’s accounts. We have significant experience counseling investment advisors on the application of the enhanced custody rule and, when deemed necessary, performing the SEC-mandated surprise examination.
Explaining the “surprise”
Traditionally regulatory agencies send examiners to “surprise” organizations. So how do you arrange for your own “surprise” audit? You enter into an agreement with Plante Moran stating that it will verify your clients’ funds and securities “at a time chosen by the Plante Moran team without prior notice or announcement” to you.
You can depend on the team to deliver the results of its surprise audit to the SEC within the required 120 days after the verification. If the team finds material deficiencies, it must report them to the SEC within a day of discovery.
In addition to a surprise audit or examination, you may need an internal control report if you have custody of client funds that are held by a “related person,” such as a trust department. The report must be done by an independent accountant who is registered with and subject to regular inspection by the Public Company Accounting Oversight Board (PCAOB) and it must be available for the SEC upon request.
Making compliance a plus
Your clients will appreciate that you use recognized specialists like those on the Plante Moran team to verify their funds and securities. In similar regulatory compliance situations, we have clients who use a solid opinion from Plante Moran to follow the law and to assure their clients they have taken extraordinary efforts to safeguard their information and their finances.