We are pleased to share this issue of Fintech in Brief, which discusses that the U.S. Securities and Exchange Commission (SEC) has announced two settled charges involving alleged violations of Rule 206(4)-2 under the Investment Advisers Act of 1940 (Advisers Act), known as the “Custody Rule.” These two actions likely result from increased scrutiny by the SEC of the custody-related practices of investment advisers. That scrutiny in turn appears to be part of an effort by the SEC to inform its anticipated revamping of the Custody Rule into a proposed new rule, the “Safekeeping Rule.” The original proposal was widely criticized by the investment adviser industry, and the SEC’s rulemaking agenda has indicated a re-proposal may be issued at the end of October 2024.

Click here to read the full issue.