Tag: custody

Why Blockchain Custody Is So Difficult—Paths Forward?

In the first post on this topic, we provided a simple answer to a question posed by the Director of the SEC’s Division of Investment Management (the “Division”): To the extent a fund plans to hold cryptocurrency directly, how would it satisfy the custody requirements of the 1940 Act and relevant rules?” Our simple answer … Continue Reading

Why Blockchain Custody Is So Difficult—A Hard Part

In our previous post, we provided a simple answer to the following question posed by Director Dalia Blass of the SEC’s Division of Investment Management: To the extent a fund plans to hold cryptocurrency directly, how would it satisfy the custody requirements of the 1940 Act and relevant rules?” Our simple answer was to treat … Continue Reading

Why Blockchain Custody Is So Difficult—The Simple Part

“There are no easy answers, but there are simple answers.”—President Reagan In a January 2018 letter to the ICI and SIFMA, Director Dalia Blass of the SEC’s Division of Investment Management posed the following question, among many others: To the extent a fund plans to hold cryptocurrency directly, how would it satisfy the custody requirements … Continue Reading

Segregating Custody of Family Office Assets

Our previous post discussed how a family office registered as an investment adviser (RIA) under the Investment Advisers Act of 1940 (Advisers Act) might underestimate the scope of its custody of family assets for purposes of Rule 206(4)‑2. The problem is that the rule’s definition of custody extends to all funds and securities an RIA … Continue Reading

Custody Pitfalls for Family Offices

The staff of the Division of Investment Management (IM) recently issued a flurry of interpretive guidance regarding when advisers are deemed to have custody of their clients’ funds and securities. The guidance covers transfers among a client’s custodial accounts, standing letters of instruction to a custodian, and inadvertent custody under the client’s custodial agreement. The … Continue Reading
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