IAA Statement on SEC Amendments to Custody Rule
October 2, 2026
Contact: IAA VP of Communications & Marketing Janay Rickwalder
The Investment Adviser Association (IAA) has long urged the Securities and Exchange Commission to make the unnecessarily complex and burdensome Custody Rule more workable and effective in achieving the SEC’s important investor protection goals. While we have much more work to do to analyze the lengthy proposal, our preliminary reaction is very positive. We are pleased to see the Commission propose many of the improvements for which the IAA has advocated for years.
We commend the SEC for proposing a workable framework for the custody of crypto assets under the Advisers Act Custody Rule. Providing greater clarity in this area is essential to the safekeeping of clients’ crypto assets.
We also appreciate that the SEC is proposing to modernize other outdated aspects of the Custody Rule. Among other things, the proposal would clarify when discretionary trading on behalf of clients is not custody, codify longstanding relief from surprise exams for standing letters of authorization that the IAA successfully sought and that has been helpful for our members, and provide greater clarity regarding situations in which advisers inadvertently receive client funds or securities.
This proposal is an important and welcome step toward a more modern, workable custody framework. We look forward to reviewing the proposal and working with our members to develop our response.
