SEC Sends Custody Rule Rewrite to White House for Review

The U.S. Securities and Exchange Commission (SEC) has forwarded a draft titled “Amendments to the Custody Rules” to the Office of Information and Regulatory Affairs (OIRA), an agency within the White House Office of Management and Budget. The filing is labeled “economically significant” and the SEC aims to publish the final rule in October 2026, pending OIRA review, a commissioner vote, and public comment.

Purpose of the Rewrite

The proposal seeks to modernize existing custody provisions so they apply to investment advisers and investment companies handling digital assets. It aims to clarify the distinction between traditional finance custodians—registered brokers, banks, and state‑chartered trust companies—and custodians of blockchain‑based assets.

Shift from Prior Plans

Former Chair Gary Gensler’s 2023 custody proposal, which extended existing requirements to crypto assets, was withdrawn under current Chair Paul Atkins. The new draft is described as a “deregulatory” redesign, though specific changes have not been disclosed.

Potential Impact Areas

• Self‑custody and multi‑signature arrangements
• Staking, lending, and other DeFi activities
• Independent verification processes for blockchain projects
• Surprise examinations of custodial practices

Next Steps

The OIRA review will determine whether the draft is revised before it proceeds to a commissioner vote and a public comment period. While an October 2026 release is the current target, the timeline could shift based on the review outcome.