SEC Proposes New Rules to Close Custody Gaps for Digital Assets
In a recent statement, SEC Chair Atkins detailed a proposed rule aimed at updating custody requirements for investment advisers. He noted that the current custody provisions under the Investment Advisers Act and Investment Company Act "predate the internet" and often lag by months when new asset classes emerge. The proposal seeks to address this disconnect between law and market practice.
Moving Beyond ‘Enforcement-as-Regulation’: A Structured Crypto Agenda
Atkins outlined a clear regulatory roadmap for digital assets, signaling a shift away from defining rules primarily through enforcement actions. The sequenced agenda includes:
- December 2025: A No-Action Letter for a Depository Trust Company (DTC) pilot on tokenized securities, offering a temporary safe harbor.
- January 2026: Clarification on the classification standards for tokenized securities.
- April 2026: Guidance on broker registration for trading interfaces involving tokenized securities.
- August 2026: A proposal for an issuance framework under “Regulation Crypto Assets.”
- Ongoing: Development of an “innovation exemption” to provide regulatory flexibility.
What’s Next: More Regulatory Proposals on the Horizon
Atkins concluded by stating that the outlined plan is just the beginning, with “more regulatory proposals already in the pipeline.” This indicates the SEC’s intent to build a comprehensive framework covering issuance, trading, and custody, aiming to provide clearer compliance guidelines rather than relying solely on retrospective enforcement.