New Model Rules Pertaining to Investment Adviser Custody and Brochure Requirements

NASAA’s Investment Adviser Regulatory Policy and Review Project Group is soliciting comments from interested persons regarding proposed changes to the NASAA model rules pertaining to investment adviser custody, financial requirements, recordkeeping and brochure delivery.

Download: Background Memo and Proposed Model Rules

The comment period begins on Thursday, February 17, 2011, and will remain open for 14 days. Accordingly, all comments should be submitted on or before Wednesday, March 2, 2011.

Public Comments Received

Summary
The Project Group has been charged with amending these rules to address changes by the U.S. Securities and Exchange Commission (SEC) to its custody and brochure rules for investment advisers. As a result of changes to SEC rules and the changes to the uniform registration forms, states may have to change their rules. The NASAA Investment Adviser Section requested that the Project Group give expedited attention to the impact of the custody and brochure rule changes as well as changes to Form ADV Part 1A.

The proposed rules keep intact the increased investor protection standards presently required by the states, while bringing them into closer harmony with  the corresponding rules of the SEC and revisions to Form ADV. The Proposed Rules also contain additional optional safeguards retained from the existing NASAA custody rule which may be adopted as desired by Administrators. The Proposed Rules are being provided under the Uniform Securities Act of 1956 and under the Uniform Securities Act of 2002.

Issues & Advocacy, NASAA Proposals, Regulatory Activity, Request for Comment