The SEC’s proposal to strengthen safe-keeping of investors’ assets is partly a reaction to crypto concerns but has triggered industry worries that it would have an outsized effect on small money managers.
The Securities and Exchange Commission’s current “Custody Rule” requires investment advisers who are in custody of clients’ funds and securities to segregate and safely hold them with “qualified custodians,” such as banks.
The new proposal expands the rule to include all types of client assets held in advisory accounts—not just funds and securities but art, property, digital currencies, and more. Money managers making discretionary trades of client assets ...
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