Investment Adviser Discretion and Custody Requirements
Delete the current 950 CMR 12.205(5) and replace with the following:
(5) Discretion and Custody Requirements
(a) An investment adviser registered or required to be registered under M.G.L. c. 110A who has discretionary authority over client funds or securities shall be bonded in an amount of not less than $50,000 by a bonding company qualified to do business in the Commonwealth.
(b) An investment adviser registered or required to be registered under M.G.L. c. 110A who has custody of client funds or securities shall comply with the provisions of SEC Rule 206(4)-2 of the Investment Advisers Act of 1940 (17 CFR 275.206(4)-2). "Custody" shall have the meaning defined therein.