SEC's position on custody where advisor has disbursement authority for like-registered accounts

We have been made aware by several custodians that the SEC has recently interpreted custody to include situations where the Advisor is given authority to move money between their client's identically registered accounts held at various custodians, resulting in deficiency letters to several Advisors. Previously, custody was invoked where Advisors made disbursements to third parties, this interpretation seems to broaden that definition. Does anyone have a copy of the deficiency letter that was sent out by the SEC or any more color on this issue?

Tanya A. Kerrigan, JD
General Counsel and CCO
Boston Advisors, LLC | One Liberty Square, 10th Floor | Boston, MA 02109
Office: 617.348.3131 | Fax: 617.348.0084 |


  • Tanya-

    I was advised by counsel that Schwab, Pershing (possibly others) and the IAA are working to seek guidance from the SEC. Identically registered accounts have been a long standing no custody principle. We are waiting for SEC guidance before taking any action.


    [Description: Description: Seizert_Logo.png]

    Cheryl A. Kotlarz
    Chief Compliance Officer

    185 Oakland Ave // Suite 100 // Birmingham, MI 48009
    Office 248 593 1500 // Direct 248 593 1519 // Mobile 586 615 0155

  • Please keep me in the loop, would love any and all updates you have.

    Joy Sheehan
    VP/Chief Compliance Officer
    Princeton Advisory Group, Inc.
    4422 Route 27
    Building C, Suite 1
    Box 89
    Kingston, NJ 08528-0089

    DIRECT: 609-514-1004
    Main: 609-514-9200
    Fax: 609-514-0330
  • edited May 2017
    IAA and Fidelity are also working together to get better guidance We agree the standing instructions issue does not fall under the custody rule.

    Keep us all in the loop if there should be an update on this.

    | Teresa L. Burch | Atwood & Palmer, Inc. | 4520 Madison Ave, Suite 200, Kansas City, MO 64111 |
    |•Phone 816.931.2266 |• Direct 816.872.3954 |•fax 816.931.0864
    |•email | •

Sign In or Register to comment.