The Qualified Custodian Rule, primarily under the Investment Advisers Act of 1940, mandates that registered investment advisers must keep client funds and securities with a qualified custodian. This rule aims to protect client assets from misappropriation or loss by requiring independent third-party custody. It ensures segregation of client assets and regular account statements.
Context
The Qualified Custodian Rule has become a central point of discussion in the digital asset industry, particularly for investment advisers managing cryptocurrency portfolios. News often covers regulatory interpretations of what constitutes a “qualified custodian” for digital assets, given the unique nature of blockchain technology. The debate centers on how traditional custody requirements can be applied to self-custody solutions and novel digital asset storage methods, prompting calls for updated regulatory guidance.
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