(Dow Jones) The Securities and Exchange Commission approved a rule Wednesday requiring some investment advisors who manage customer funds to undergo annual surprise audits.

The rule approved was scaled back slightly from the SEC's original for investment advisors. The final rule exempts advisors who have limited access to customers' money and only have the ability to collect agreed-upon adviser's fees.

The rule is prompted by the Bernard Madoff scandal, requiring certain SEC-registered advisors who have custody of clients' assets to retain an independent public accountant to conduct an annual surprise exam to verify that the money actually exists.

If funds are found missing during the process, the accountants must notify the SEC.

"In several situations there is heightened opportunity for an advisor to misappropriate a client's assets and convert those assets to personal use," SEC Chairman Mary Schapiro said. "Today's rules will institute important new controls to guard against possible foul play in those situations."

For hedge funds and other private pools of capital, the rules require auditors of those funds to be registered with and subject to regular inspection by the Public Company Accounting Oversight Board.

Schapiro said she agreed with some who commented on the proposed rule who said a surprise exam requirement for hedge funds would be duplicative if those funds also are subjected to annual audits.

The rule also includes new requirements that auditors explain the basis for ending their service to an advisor. "This so-called 'noisy withdrawal' can serve as a red flag to our staff and the advisor's clients," Schapiro said.

The commission will study the rule's impact on small advisors and their retail clients, acknowledging concerns from some who said the requirements could be costly.

Commissioner Elisse Walter said she would be "loathe" to exempt smaller advisors from the surprise audit requirement. "I also want us to remember that there are real risks to investors in that situation," she said, adding that those investors could be "more vulnerable."

Commissioner Luis Aguilar said he considers the rules as an "incremental step" toward protecting investors, noting that 1,859 out of the universe of 11,300 investment advisors will be subjected to audits.

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