The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (OCIE) has announced that when performing examinations of the books and records of regulated persons and organizations such as registered investment advisors, the SEC may request independent confirmation of investor assets from various third parties, including bank and broker-dealer custodians, account administrators, investors in hedge funds managed by the advisor, advised clients, derivative counterparties, hedge fund administrators and/or managers that are invested in by advised clients, National Securities Clearing Corp., Depository Trust & Clearing Corp., and auditors for the advisory firm and/or investor accounts. In separate letters to the Managed Funds Association and the Investment Adviser Association, OCIE staff stated that the SEC’s confirmation requests will make clear that the requests should not be construed as an indication by the SEC that any violations of law have occurred, nor should the confirmation requests be construed as an adverse reflection upon the advisor.  

http://www.managedfunds.org/downloads/MFA%20Letter%203.9.2009.pdf  

http://investmentadviser.org/eweb/docs/Public/IAA3.9.2008.PDF