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Form ADV Part 1A Item 9A(1)(b) · Answer type: yn · Item 9A - Custody
Item 9A(1)(b) asks whether the adviser or a related person has custody of client securities: meaning they have authority, access, or control over client investment assets like stocks, bonds, mutual funds, or other securities beyond simple investment advisory authority.
Custody of securities goes beyond discretionary investment management where advisers can buy and sell securities for client accounts held at independent custodians. It means the adviser has actual possession, control, or access to the physical securities or electronic security positions in ways that create custody obligations under SEC rules.
SEC custody definitions can be complex, covering situations like holding client securities certificates, having authority to withdraw securities from client accounts, serving as trustee for client assets, or having general partner authority over pooled investment vehicles that own securities.
Most traditional investment advisers manage client securities through independent qualified custodians without having custody themselves. An adviser who holds physical stock certificates, has withdrawal authority beyond trading, or serves as general partner of funds would mark Yes.
Yes
The adviser has custody of client securities under SEC definitions. This triggers enhanced regulatory requirements including qualified custodian arrangements, specific client protections, and regulatory oversight to safeguard client investment assets.
No
The adviser does not have custody of client securities. Client securities are held by independent qualified custodians, with the adviser having only discretionary investment management authority rather than actual custody of the assets.
9A(1)(b) - Securities (Yes / No).
This checkbox is part of Item 9A, which covers custody arrangements and the various ways advisers might have custody of client assets, requiring specific safeguards and oversight.
Securities custody creates significant responsibilities for protecting client investment assets and requires strict regulatory compliance. A Yes answer means you should understand what custody safeguards protect your investments and how these arrangements affect your account security.
When advisers have securities custody, they must follow detailed SEC rules including using qualified custodians, providing client notifications, undergoing surprise examinations, and maintaining comprehensive records. However, custody can also enable certain investment strategies or account structures that require direct securities control.
A Yes does not tell you what type of securities custody authority the adviser has, which qualified custodian safeguards your securities, what specific access or control the adviser exercises, how securities custody affects account administration, or what additional protections you receive as a custody client.
Review the remaining Item 9 rows for the custody basis, affected assets and clients, qualified custodian, and reported procedures. Compare those answers with the custodian and withdrawal authority named in the account agreement.
Yes
Check the remaining Item 9 rows for the reported custody amount, client count, custodian, and compliance procedures. Then verify the same names and authority in the account agreement.
Also examine 9B(1)(b) to see if they have securities custody through pooled investment vehicle arrangements, which involves different custody considerations and safeguards.
No
The adviser does not report custody of client securities. This suggests traditional advisory arrangements where client securities are held by independent custodians with the adviser having only investment management authority. Review 9A(1)(a) to see if they have custody of client cash even without securities custody.
Check their brokerage practices in Item 8 to understand how client securities transactions are executed and settled when they don't have direct custody.