SIFMA Welcomes the Introduction of the Uniform Treatment of Custodial Assets Act

Washington, D.C., September 27, 2023 – SIFMA today issued the following statement from president and CEO Kenneth E. Bentsen, Jr. on the introduction of legislation, the Uniform Treatment of Custodial Assets Act, which would address the capital treatment of digital assets held in custody at a financial institution:

“SIFMA applauds the introduction of the Uniform Treatment of Custodial Assets Act, which would provide greater regulatory clarity around the custody of digital assets and address the capital treatment of digital assets held in custody in the wake of the SEC’s problematic Staff Accounting Bulletin No. 121 (SAB 121). SAB 121 requires financial institutions acting as a custodian to record a liability on their balance sheet in the amount equal to the digital assets under custody, which not only deviates from the existing accounting treatment of assets held in custody but would limit the ability of retail investors to safely custody their digital assets given the punitive capital impact would be incurred by banks as a result of this treatment.”

“Banks are already subject to extensive prudential rules and oversight and have deep expertise in providing safe custody of a wide variety of assets. This bipartisan legislation represents a commonsense solution to a problem manufactured by the SEC and would allow banks to provide digital asset-related custody services for their clients.”

SIFMA also sent a letter of support expanding on these views which can be found here.

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.