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SEC proposes tailored crypto custody rules for advisers and regulated funds
The proposal could permit certain forms of self-custody and state trust company custody while changing audit and broker-dealer requirements, but no rule is final.
The Securities and Exchange Commission has proposed a tailored custody framework for crypto assets held by registered investment advisers and regulated funds. In this proposal, regulated funds include registered investment companies and business development companies. The changes are proposed rather than final.
The Commission says the framework would remove regulatory barriers that limit crypto-related investment advice and would let regulated funds give clients access to a broader range of crypto investment strategies. Those are the SEC’s expected effects; they depend on what survives the rulemaking process.
Custody choices could expand
Under certain circumstances, the proposal would permit self-custody of crypto assets. It would also allow state trust companies to serve as custodians for client and regulated-fund crypto assets. The release does not spell out the qualifying self-custody circumstances.
Other proposed changes address financial-statement audits for registered investment advisers and the use of broker-dealers as custodians for regulated funds. The public comment period will run for 60 days after the proposing release is published in the Federal Register, so the release itself does not establish a calendar deadline.
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