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PUBLIC LAW 111–203—JULY 21, 2010 124 STAT. 1577

‘‘(ii) has assets under management between—
‘‘(I) the amount specified under subparagraph
(A) of paragraph (1), as such amount may have
been adjusted by the Commission pursuant to that
subparagraph; and
‘‘(II) $100,000,000, or such higher amount as
the Commission may, by rule, deem appropriate
in accordance with the purposes of this title.’’.

SEC. 411. CUSTODY OF CLIENT ASSETS.
The Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.)
is amended by adding at the end the following new section:

‘‘SEC. 223. CUSTODY OF CLIENT ACCOUNTS. 15 USC 80b–18b.
‘‘An investment adviser registered under this title shall take
such steps to safeguard client assets over which such adviser has
custody, including, without limitation, verification of such assets
by an independent public accountant, as the Commission may,
by rule, prescribe.’’.

SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.
The Comptroller General of the United States shall—
(1) conduct a study of—
(A) the compliance costs associated with the current
Securities and Exchange Commission rules 204–2 (17
C.F.R. Parts 275.204–2) and rule 206(4)–2 (17 C.F.R.
275.206(4)–2) under the Investment Advisers Act of 1940
regarding custody of funds or securities of clients by invest-
ment advisers; and
(B) the additional costs if subsection (b)(6) of rule
206(4)–2 (17 C.F.R. 275.206(4)–2(b)(6)) relating to oper-
ational independence were eliminated; and
(2) submit a report to the Committee on Banking, Housing, Reports.
and Urban Affairs of the Senate and the Committee on Finan- Deadline.
cial Services of the House of Representatives on the results
of such study, not later than 3 years after the date of enactment
of this Act.

SEC. 413. ADJUSTING THE ACCREDITED INVESTOR STANDARD. 15 USC 77b note.
(a) IN GENERAL.—The Commission shall adjust any net worth
standard for an accredited investor, as set forth in the rules of
the Commission under the Securities Act of 1933, so that the
individual net worth of any natural person, or joint net worth
with the spouse of that person, at the time of purchase, is more
than $1,000,000 (as such amount is adjusted periodically by rule
of the Commission), excluding the value of the primary residence
of such natural person, except that during the 4-year period that
begins on the date of enactment of this Act, any net worth standard
shall be $1,000,000, excluding the value of the primary residence
of such natural person.
(b) REVIEW AND ADJUSTMENT.—
(1) INITIAL REVIEW AND ADJUSTMENT.—
(A) INITIAL REVIEW.—The Commission may undertake
a review of the definition of the term ‘‘accredited investor’’,
as such term applies to natural persons, to determine

LAWS whether the requirements of the definition, excluding the requirement relating to the net worth standard described in subsection (a), should be adjusted or modified for thePUBLIC with on anorris VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00203 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203