Adviser and Regulated Fund Custody Rules; Crypto Custody Rules (Joint Trades)

Summary

SIFMA, SIFMA AMG, Associations of Global Custodians, Bank Policy Institute (BPI), Alternative Investment Management Association (AIMA), LSTA, and American Bankers Association (ABA), provided comments to the SEC requesting to extend the comment period for the Commission’s proposed Adviser and Regulated Fund Custody Rules and Crypto Custody Rules (“the Proposal”). ¹

Excerpt

We welcome the efforts of the Commission and the Division of Investment Management to update the custody framework for funds and advisers. The Proposal would modernize and clarify several elements of existing custody requirements and would establish a dedicated framework for the custody of crypto assets. We recognize that the Proposal represents a significant undertaking by the Commission and Staff, and we appreciate the Commission’s commitment to addressing several longstanding questions regarding custody requirements for funds and advisers.

As the Proposal explains, changes in technology and evolving market practices have driven the need to modernize several custody provisions under the Advisers Act and the Investment Company Act. While we support the Commission’s goal of modernizing the custody framework, we note that the Proposal addresses numerous complex questions, many of which are technical in nature, and poses more than 300 specific requests for comment. This includes the proposed framework for the custody of crypto assets, which raises important questions for asset managers and for the banks and broker-dealers that provide custody services.

To ensure that market participants seeking to evaluate and provide substantive input on the Proposal are well-positioned to provide constructive feedback, particularly as market participants concurrently review several significant SEC rulemaking proposals with overlapping comment periods, ² we believe additional time to develop comments would be helpful to meaningfully address longstanding questions and advance the Commission’s objective of durable modernization.

In addition, the Commission has other proposals out for comment at the same time. Their significance and potential consequences warrant dedicated attention and many of the same market participants and personnel are involved in analysis and response.

Accordingly, we respectfully request that the Commission extend the December 7th comment deadline by 45 calendar days to provide our members and other market participants additional time to review the Proposal and provide substantive feedback to the Commission.