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Kai Ryssdal: It has been just over a year since Bernie Madoff was arrested. The Securities and Exchange Commission has taken a lot of heat for missing Madoff's scam for so many years. So they've come up with some new rules. Rules that affect financial advisers like Madoff, people who advise you on your assets and who can get their hands on your cash as well. From New York, Ashley Milne-Tyte reports.
ASHLEY MILNE-TYTE: There are only about 2,000 of these advisers. They're registered with the SEC and manage at least $25 million. And unlike most advisers they have control over their clients' money.
Robert Plaze is with the division of investment management at the SEC. He says from now on...
ROBERT PLAZE: There'll be an audit each year performed on the adviser's books to see if his or her books comports with the custodian's books and that your assets are where the adviser tells you they are.
There will be surprise exams too. He says advisers will have to hire independent accountants to check the assets actually exist. He compared the whole process to an annual physical.
PLAZE: Think of this type of regulatory cost as similar to a physical checkup. Costly in the short run but maybe much cheaper in the long run when there's another loss of the size we had with Madoff.
Some financial advisers welcomed the new rules.
Gary Schatsky is a financial adviser in New York. He's not affected by the regulations. But he says his whole profession has been tainted by the Madoff scandal.
GARY SCHATSKY: Whether there are other things they can do, surely there's plenty the SEC can do and hopefully they're considering it. But this is without question a step in the right direction of providing confidence to the investing public.
The SEC says the new rules will be in effect by March.
In New York, I'm Ashley Milne-Tyte for Marketplace.