The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) has published information regarding its new practice of requesting independent confirmation of account balances directly with various persons, including clients and shareholders, as part of its examinations of the books and records of securities firms and investment advisors. The request will be in the form of a “Routine Account Information Confirmation” sent to clients and shareholders, the response will be voluntary and the SEC emphasizes that in no way should receipt of the form be construed as an indication of any problem or irregularity by the firm being inspected. The form lists the amount of the client’s balance with, last deposit to, and last withdrawal from, the securities firm or investment advisor being examined, with this information taken from the books and records of the firm or advisor, and asks the client to confirm whether this balance, deposit and withdrawal information is consistent with its own records. A cover letter sent with the form will include the contact information of an SEC examiner in the event the client has any questions or wants to confirm that the request actually came from the SEC.
To view a sample “Routine Account Information Confirmation” form click here.
See also the March 13, 2009, edition of Corporate and Financial Weekly Digest, discussing separate letters written by OCIE staff to the Managed Funds Association and the Investment Adviser Association regarding the SEC’s announcement of the new examination practice