Last week the SEC issued a Risk Alert and an Investor Bulletin on the Custody Rule after its National Examination Program ("NEP") observed significant deficiencies in recent examinations involving custody and safety of client assets by registered investment advisers. The stated purpose of the Risk Alert was to assist advisers with complying with the custody rule. The Investor Bulletin was issued to explain the purpose and limitations of the custody rule to investors. We encourage advisers and investors to review the Risk Alert and the Investor Bulletin, and remind advisers, particularly advisers to private equity funds, fund of funds and funds that invest in illiquid assets that they may only self custody securities if they satisfy the requirements for "privately offered securities" (i.e., securities are (i) not acquired in any transaction involving a public offering, (ii) uncertificated, (iii) transferable only with the prior consent of the issuer and (iv) are held by a fund that is audited). Many advisers may not be in compliance with the custody rule because they self custody assets that do not satisfy the definition of privately offered securities.