The US’ Securities and Exchange Commission (SEC) has proposed new rules for a framework that will guide the custody of crypto assets, applicable to registered investment advisers and regulated funds.
The commission claims in a press release that the proposal aims to “modernise custody rules and expand investor choice by removing regulatory barriers that inhibit the adviser’s ability to provide crypto-related investment advice”. Another goal is to make a wider range of crypto asset-related investment strategies available to clients of regulated funds.
After the amendments, the rules should better address industry practices and the requirements related to financial statement audits and broker-dealer custodial services. Custody under state trust companies will be permitted, as well as self custody “under certain circumstances”.
SEC chair Paul Atkins says, “The crypto asset market has grown from a niche curiosity into a multi-trillion-dollar asset class to which investors actively seek exposure. Unfortunately, our rules and regulations have not kept pace. To that end, today’s proposal would provide a clear regulatory framework for the custody of crypto assets, giving investment advisers and funds a compliant pathway where none existed before – and replacing the grey of uncertainty created by custody rules crafted for a bygone era.”