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IA Custody Rule

Definition ∞ The IA Custody Rule, or Investment Advisers Act Rule 206(4)-2, is a regulation from the Securities and Exchange Commission that mandates specific protections for client funds and securities held by investment advisers. It requires advisers to safeguard client assets by holding them with a qualified custodian, ensuring independent verification, and providing periodic account statements. This rule aims to prevent fraud and mismanagement of client holdings. It establishes clear standards for asset protection.
Context ∞ The IA Custody Rule is frequently discussed in news concerning financial regulation, particularly as it relates to investment advisers dealing with digital assets. Its application to cryptocurrencies and other digital securities presents ongoing interpretive challenges for the SEC and the industry. Compliance with this rule is a significant consideration for institutions seeking to offer digital asset investment services.

A futuristic, metallic device with an open casing reveals intricate, glowing blue circuitry, suggesting active blockchain node operations. White, cloud-like material is integrated within the central processing core and around the exterior, possibly indicating an advanced cooling mechanism for high-intensity hashing power or a representation of cold storage for digital assets. This visualizes the complex decentralized ledger technology DLT infrastructure essential for transaction validation and maintaining network integrity through robust cryptographic primitives.

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SEC Staff Permits State Trust Companies as Qualified Crypto Custodians

Institutional investors gain critical operational clarity as the SEC affirms State Trust Companies satisfy Qualified Custodian requirements for digital assets.