Must the surprise examination required under rule 206(4)-2(a)(4) be completed before December 31, 2010?
No. The surprise examination must commence on or before December 31, 2010 but does not need to be completed until 120 days after the time chosen by the accountant performing the surprise examination. If the adviser itself maintains client assets as qualified custodian, the first surprise examination must commence no later than six months after obtaining the internal control report. For an adviser that becomes subject to the rule after the effective date, the surprise examination must commence within six months after it becomes subject to the rule. However, as a transitional matter, the Division would not recommend enforcement action to the Commission if an adviser that becomes subject to the rule after the effective date has its first surprise examination commence by the later of six months after the adviser becomes subject to the rule or December 31, 2010.