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.
The SEC's custody clarification mandates RIAs update compliance frameworks, strategically unlocking institutional access to digital assets via state-level trust infrastructure.
The SEC's no-action relief operationalizes institutional digital asset custody by clarifying the "qualified custodian" status for state-chartered trust companies.
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