The Securities and Exchange Commission Wednesday announced it had created new rules to protect customer funds held by broker-dealers, but so far the impact of these rules on financial advisors is uncertain.
In the new mandates, broker-dealers holding custody of their customers’ stocks, bonds and cash must periodically file a report verifying to the SEC that they are meeting capital requirements and periodically sending account statements to customers. The report must be certified by a public accountant registered by the Public Company Accounting Oversight Board.
B-Ds will also be required to file new quarterly reports disclosing whether they maintain custody of their customers’ securities and cash and, if so, how.
SEC Chairman Mary Jo White said these measures will go even further toward the protection of investor funds held in custody. But the devil is in the details, and Satan is still in hiding.
With over 600 pages of new regulations to digest, the Securities Industry and Financial Markets Association (Sifma), the Investment Adviser Association and other trade groups and experts have declined to comment until they have time to examine the material.