SEC Proposes Rule Changes to Custody of Investment Advisor Client Assets

The Securities and Exchange Commission (SEC) has issued a proposed rule “Safeguarding Advisory Client Assets.” The SEC indicates in a press release that the proposed changes are intended to help ensure that qualified custodians provide certain standard custodial protections when maintaining an advisory client’s assets. These protections are designed, among other things, to ensure client assets are properly segregated and held in accounts to protect the assets in the event of a qualified custodian bankruptcy or other insolvency.

Comments must be made within 60 days of publication in the Federal Register.