The Securities and Exchange Commission is examining the procedures certain investment advisers and broker-dealers have in place for safeguarding client assets.

An industry source has confirmed the SEC is looking at firms' custodial arrangements, controls for safekeeping assets, and the implementation of these controls. These details were outlined in a letter from Lori Richards, director of the SEC's office of compliance inspections and examinations.

The letter said SEC staff will conduct on-site interviews with employees who safeguard client assets.

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