SIFMA Submits Comments to the GAO on the GAO's Study of Custody Rule Costs

SIFMA submitted the attached fairly extensive comments to the Government Accountability Office ("GAO") on the GAO Study of Custody Rule Costs. The study is required by Dodd-Frank Section 412, and is intended to highlight the compliance costs that registered investment advisers incur to comply with Rule 206(4)-2 (the "Custody Rule") under the Advisers Act, as well as the costs which advisers might incur if the surprise-examination exemptions under the Custody Rule were eliminated. SIFMA stated that it is concerned that the application of certain provisions of the Custody Rule, under the amendments finalized on December 30, 2009, imposes significant costs on certain industry participants, particularly dual registrants (i.e., entities registered as both broker-dealers and advisers) and advisers that use related broker-dealers as qualified custodians to maintain custody of clients' assets, without adding commensurate protections for investors or clients.

Click here to view letter in full (links externally to SIFMA website).