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IA Watch published a few recent document request letters in connection with SEC examinations of investment advisers. One is a document request letter sent to a private fund manager (subscription required; 7-day free trial available).
These are some of the items requested that caught my attention:
It's clear from the letter that examiners are focused on custody issues and side pocket issues.
The SEC has been up front about this. The custody rule may be a headache, but its intended to prevent another Madoff. By getting account statements directly from the custodian instead of the adviser, you have a control in place to prevent fraud.
Sources:
For additional commentary on developments in compliance and ethics, visit Compliance Building, a blog hosted by Doug Cornelius.
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