The SEC Proposes to Modernize Custody Rules Under the Advisers Act and Investment Company Act
If observers thought the end of the SEC’s fiscal year in September would bring a moment of rest for SEC staff (and for market participants) following a number of recent rulemakings, policy initiatives and staff guidance, the SEC showed that its foot remains fully on the gas. Already having made noteworthy progress on its ambitious agenda, on October 1st, the SEC published a proposed rulemaking (the “Proposal”) to modify and redesignate the Advisers Act Custody Rule (Rule 206(4)-2) and also revise various rules under Section 17(f) of the Investment Company Act. If adopted, the Proposal would rationalize various elements of the existing Custody Rules to address problems faced by registered investment advisers and regulated funds, and would provide a tailored framework for the custody of crypto assets. This client memorandum offers practical implications for managers, as well as a summary and detailed overview of the Proposal.
To view and print the full memorandum, please click here.