SEC Chair Proposes Self‑Custody Rules for Investment Advisers

SEC Chairman Paul Atkins announced a new regulatory initiative that would allow registered investment advisers to hold crypto assets directly for clients, rather than requiring a third‑party custodian. The proposal, discussed at the Solana Policy Institute Summit, is part of a broader three‑pillar framework the agency is developing for digital‑asset regulation.

Self‑custody for advisers

Atkins directed SEC staff to draft rules that would permit advisers to maintain custody of crypto assets themselves, including assets held for regulated funds, when a qualified third‑party custodian is unavailable. The same proposal would enable state‑chartered trust companies to act as custodians for advisers and funds.

Related regulatory pillars

The custody proposal is intended to work alongside two other initiatives:

• Regulation Crypto Assets – a rulemaking effort that would create a tailored offering regime for certain crypto‑related investment contracts, with exemptions for offerings up to $5 million over four years or $75 million in a 12‑month period, subject to disclosure requirements.
• Transfer‑agent modernization – a revision of long‑standing transfer‑agent rules to address electronic communications, recordkeeping, blockchain technology, and securities‑transfer processes.

Legislative context

Atkins also urged Congress to advance the CLARITY Act, which seeks to clarify when a crypto‑related investment contract ceases to exist. The Senate vote on advancing the bill fell short of the required 60 votes, leaving the legislation stalled.

Implications

If adopted, the self‑custody rules could provide a clearer path for advisers to manage digital assets directly, especially for assets lacking suitable third‑party custodians. The broader framework aims to integrate crypto issuance, transfer, and custody under a unified federal securities regime.