09.20.23

Trade Groups Plead With SEC To Rethink Custody Rule Plan

by: Melanie Waddell

More than a score of trade groups with ties to the financial service industry are urging the U.S. Securities and Exchange Commission (SEC) not to adopt its Safeguarding Advisory Client Assets proposal “in its current form.” The 26 groups told SEC Chair Gary Gensler in a letter that the agency should first “gain a better understanding of the current” custodial framework. In February, the SEC voted to expand the scope of the current advisor custody rule beyond client funds and securities to include any client assets of which an advisor has custody, including cryptocurrencies. On Aug. 23, the SEC reopened the comment period on the proposed new safeguarding rule that would redesignate and amend the current custody rule under the Investment Advisers Act. The rule was published on Aug. 30 in the Federal Register for a 60-day comment period.

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