The Securities and Exchange Commission (SEC) has published a fact sheet and a proposed rule, designated as Release No. S7-2026-35, aimed at modernizing custody arrangements for digital assets.
The proposal focuses on registered investment advisers (RIAs) holding client crypto funds and regulated investment companies managing crypto securities. It seeks to update frameworks established by the Advisers Act and the Investment Company Act.
A key provision allows qualified state-chartered trust companies to serve as permissible custodians, provided they meet specific regulatory conditions. This initiative builds upon a no-action letter issued by the SEC on September 30, 2025.
The SEC has opened the proposal for public comment for a period of 60 days, starting from the date of its publication in the Federal Register. Industry participants are expected to discuss requirements for segregation and risk management.
