Investment Adviser Custody

Definition ∞ Investment adviser custody describes the legal and operational responsibility an investment adviser assumes over a client’s assets, including digital assets. It involves possessing client funds or securities, or having the authority to obtain possession or control over them. Regulations govern investment adviser custody to ensure client assets are protected from misuse or loss. Proper custody practices are essential for maintaining investor confidence and complying with securities laws.
Context ∞ Investment adviser custody of digital assets is a highly scrutinized area within financial regulation, often appearing in news related to securities and digital asset markets. Regulators are actively working to clarify how existing custody rules apply to novel digital asset structures and the specific technological considerations involved. The ongoing development of clear guidance for investment advisers is critical for expanding institutional participation in the digital asset space while upholding investor protection standards.