Rule 206(4)-2 deems it fraudulent for a registered adviser with custody of client funds or securities (possession, authority to withdraw, or a capacity such as general partner that gives legal ownership or access) to hold them other than with a qualified custodian in the client's name or in the adviser's name as agent, to leave the client without written notice of who the custodian is and of any change, to fail to have a reasonable basis for believing the custodian sends quarterly account statements directly to the client, and to fail to obtain an annual surprise examination by an independent public accountant under a written agreement that requires the accountant to report discrepancies to the SEC within one business day and to file Form ADV-E. Pooled vehicles may instead rely on audited financial statements distributed within one hundred twenty days of fiscal year end (one hundred eighty for funds of funds). Where the adviser or a related person is the custodian, an internal control report from a PCAOB-registered and inspected accountant is also required.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.