On October 1, 2026, the Securities and Exchange Commission proposed new rules under the Investment Advisers Act of 1940 and Investment Company Act of 1940.
Key elements include:
- Permit advisers and regulated funds to self-custody crypto assets in certain circumstances and subject to conditions
- Permit custody through state-chartered trust companies, subject to conditions
- Modernize custody rules to better address current industry practices
Chairman Paul S. Atkins stated the proposal closes a gap that has left investment advisers and funds guessing how to effect lawful custody of crypto assets. Commissioner Mark T. Uyeda noted that for novel crypto assets, self-custody may be the only available option when no qualified custodian is willing or able to hold those assets.
The proposal also seeks to update circumstances in which regulated funds may use broker-dealers as custodians, exclude authorized discretionary trading from the Advisers Act custody rule under conditions, and provide exceptions from independent verification requirements.
Release Nos. IA-7023, IC-36353 (Oct. 1, 2026). Comments open for 60 days after Federal Register publication.