Safeguarding Client Assets: SEC Proposes Overhaul of Adviser Custody Rule
March 20, 2023
The U.S. Securities and Exchange Commission, by a vote of four-to-one, proposed a major overhaul of the investment adviser custody rule on February 15, 2023. The proposal would amend and redesignate Rule 206(4)-2 under the Investment Advisers Act of 1940 (Custody Rule), as new Rule 223-1 under Section 223 of the Advisers Act (Proposed Rule).1
Footnotes
1) Safeguarding Advisory Client Assets, Release No. IA-6240 (Feb. 15, 2023) (Release). The three Democratic Commissioners, Chairman Gary Gensler, Commissioner Caroline A. Crenshaw and Commissioner Jaime Lizárraga, and one Republican Commissioner, Commissioner Mark T. Uyeda, voted to propose the Proposed Rule, whereas one Republican Commissioner, Commissioner Hester M. Peirce, dissented. At times, this Dechert OnPoint tracks the Release without the use of quotation marks. Terms not defined in this Dechert OnPoint have the meaning assigned to them in the Release.
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