The U.S. Securities and Exchange Commission has introduced a proposal to update regulations concerning how investment advisers and regulated funds manage client assets. The initiative focuses on establishing a formal framework for the custody of digital assets, aiming to replace outdated rules that did not account for the current market structure.
Under the proposed guidelines, investment advisers and funds may hold client crypto assets directly if no permitted custodian is available. The regulator also intends to allow the use of state trust companies as custodians for these assets, provided that specific conditions are met. Additionally, the proposal suggests that blockchain-based records could be recognized for compliance purposes.
SEC Chairman Paul S. Atkins stated that the agency is moving forward with these rules to provide a clear pathway for market participants. This regulatory push continues despite the failure of the Clarity Act to advance in a procedural vote last month. The SEC had previously submitted a proposal to the White House to clarify custody frameworks for investment advisers.
