SEC Staff Provides Relief under the Custody Rule with Respect to Restricted Stock Certificates Held by Private Funds

6 August 2013
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  • On August 1, 2013, the Division of Investment Management of the Securities and Exchange Commission issued an important IM Guidance Update that provides relief to private fund sponsors with respect to the requirement that they maintain certain certificated, privately-offered securities (including restricted stock certificates) with a qualified custodian.
  • Private fund sponsors should adopt policies and procedures to ensure that any certificated, privately-offered securities that are not maintained with a qualified custodian, in reliance on the new IM Guidance Update, are appropriately safeguarded