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CALIFORNIA CORPORATE & SECURITIES LAW

Commissioner Adopts Rewrite Of Investment Adviser Custody Rule

To many, the words “custody” and “hide” would seem to have absolutely nothing in common.  Etymologically speaking, however, they are cognates (blood relatives).  Their common ancestor is the Proto-Indo-European etymon – “(s)keu”, meaning to cover or hide.  In Latin, this word became “custos”, meaning a guardian.  It’s easy to see how the “(s)keu” might become “custos” because they both include…

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Can The DBO Incorporate By Reference A Federal Form?

Almost a year ago, the Commissioner of Corporations (now the Commissioner of Business Oversight) proposed to amend the custody rule, 10 CCR Section 260.237, for investment advisers under the Corporate Securities Law of 1968.  The Department received several comments and recently proposed to amend its proposed custody rule by expressly incorporating by reference Form ADV-E and…

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Commissioner Proposes Custody Rule

Over a year ago, the Commissioner issued this invitation for comments with respect to a complete rewriting of California’s custody rule for investment advisers, 10 CCR § 260.237.  The Commissioner received a number of comments.  However, none of the commenters suggested a comprehensive alternative approach.  Now, the Commissioner has issued notice of her intention to proceed with…

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Commissioner Invites Comments On Adopting New Custody Rule

Investment advisers frequently have custody, either directly or indirectly, of their clients’ assets.  Obviously, custody of another’s assets can lead to infidelity.  In the word’s of the satirist Juvenal, the question necessarily becomes “sed quis custodiet ipsos custodes? (but who shall guard the guards?). In the case of registered investment advisers, securities regulators are the…

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