Compliance Considerations in Custody (IA) (Intermediate)
While it has been over a decade since the custody rules were last revised, custody remains one of the most complex (and least intuitive) issues for investment advisers. It seems that everyone still has questions about applying custody rules and guidance to their own situations. The one thing you must not do is to allow reps and staff to make custody decisions for themselves – you need to establish bright lines in your custody procedures to keep your firm from finding itself with custody when you didn’t want it. This session digs into the various ways in which a firm may have custody (including first- and third-party transfers from client custodial accounts) and discuss best practices for designing procedures to prevent your firm from having “accidental custody.”
After attending this session, attendees should be able to:
- Identify practices in your firm that are potential sources of custody
- Clarify issues surrounding SLOAs, first- and third-party transfers, and having custody through the activities of an affiliate
- Reinforce current procedures to prevent and detect instances of “accidental custody”
This course is being taught as part of the Fall 2021 In-Person Compliance Conference. To learn more, visit our main conference webpage.
Partner, K&L Gates
Michael McGrath is a partner in the firm’s Boston office. He practices in the areas of investment management, securities, and commodities law, including the representation of institutional investment firms, registered investment companies, private equity and hedge funds.
Mr. McGrath counsels SEC, CFTC, NFA, and FINRA regulation. His practice is focused on helping financial institutions design their compliance programs, supporting trading and investment management issues including best execution, soft dollars, control of nonpublic information, and derivatives trading, and assisting with SEC and NFA staff examinations.
Mr. McGrath also has extensive experience counseling clients on regulatory matters that relate to strategic business decisions, including:
- transactional, regulatory, and operational issues arising from mergers and reorganizations of investment funds and their investment advisers;
- optimal corporate and operational structures related to affiliated investment managers, cross-border operations, and joint ventures;
- the development of novel alternative investment strategies and the offering of such strategies through various types of investment vehicles; and
- emerging regulatory issues related to crowdfunding, social media, cybersecurity, and financial technology.
Mr. McGrath is a CFA charterholder.
Prior to joining K&L Gates in 2011, Mr. McGrath was a Vice President and Senior Counsel with Allianz Global Investors, where he provided counsel in several different areas including: compliance with regulatory requirements, mergers and reorganizations of business units, the formation and offering of private funds and mutual funds, and the negotiation of investment management agreements, side letters, trading agreements, and derivatives documentation.
Publications and Speaking Engagements
Michael regularly contributes articles for K&L Gates client alerts and for business trade journals in the financial services industry in publications such as The Investment Lawyer and The Hedge Fund Law Report. He is a frequent speaker at leading conferences hosted by investment industry trade associations such as the Investment Adviser Association, the National Society of Compliance Professionals, Financial Research Associates, and the National Regulatory Service. He speaks on investment adviser, investment company, and hedge fund regulatory and compliance issues, as well as the impact of emerging technologies on the investment industry.
- Boston Securities Analysts Society
- CFA Institute
- J.D., Duke University School of Law, 2002
- A.B., Stanford University, 1999
Courtney joined NRS in 2021 and is based in Austin, Texas. Courtney delivers comprehensive compliance solutions to all types of investment management firms. As a consultant, Courtney works closely with each firm’s officers and senior staff to identify regulatory obligations, unique conflicts of interest and other risks to assist in the development, implementation and testing of a comprehensive compliance program tailored to the firm’s practice.
Courtney has over 10 years of experience in the financial services industry serving on both the regulatory side and in the private sector. Early in her career Courtney worked for the Texas State Securities Board, first as a Financial Examiner conducting inspections of Texas-registered investment advisers and broker-dealers, and then as an attorney in the Inspections and Compliance Division. In 2014 Courtney moved to the private sector, accepting a position as the Chief Compliance Officer for a fixed-income broker-dealer. Since then, Courtney has served as the Chief Compliance Officer for investment advisers, including an adviser to private funds, registered investment companies, and a registered municipal adviser.
Courtney earned her Bachelor of Business Administration degree in Accounting from Texas Wesleyan University, her Juris Doctor degree from Texas Wesleyan University School of Law (now known as Texas A&M University School of Law) and is a member of the Texas state bar.
For Whom: Designed to increase the professional competence of Investment Advisers.
Suggested Skill Level: Intermediate
Maximum Recommended Credit Hours for this session will include CLE, IACCP® and CPE.
CA MCLE = 60 minutes
IACCP® = 60 minutes
CPE = 60 minutes
For more information, check out the NRS Continuing Education Guide.