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Code · BILL · 117th Congress · S. 4356 (Introduced in Senate) — To provide for responsible financial innovation and to bring digital assets within the regulatory perimeter. · Sec. 304

Sec. 304. Custody and customer protection rules

359 words·~2 min read·/bill/117/s/4356/is/section-304

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Not later than 18 months after the date of enactment of this Act, the Commission shall— complete the multi-year study of the Commission with respect to the modernization of the rules of the Commission relating to customer protection (section 240.15c3–3 of title 17, Code of Federal Regulations) and custody of securities, digital assets, and client funds (section 275.206(4)–2 of title 17, Code of Federal Regulations); and consistent with the results of the study described in subparagraph (A), adopt final rules relating to the issues described in paragraph (2).
The final rules adopted under paragraph (1)(B) shall address the following concepts: Investor protection and education with respect to digital assets. Digital assets, distributed ledger technology, and use of collaborative custody or multi-signature arrangements, including distribution of private key material and resulting obligations. Changes in market structure and asset characteristics, including disuse of physical securities and assets and appropriate custodial methods for electronically native assets.
Reduction of regulatory burden. Use of technology to facilitate regulatory compliance and risk management. Parity of State- and nationally chartered banks, as defined in section 202(a) of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–2(a) ), with respect to asset custody in a manner consistent with that Act ( 15 U.S.C. 80b–1 et seq. ) and other existing law. Standards under which an issuer of an unregistered digital asset that is, or may represent ownership of, a security is not required to utilize a registered transfer agent.
Specification of the digital assets which constitute client funds under section 275.206(4)–2 of title 17, Code of Federal Regulations. Not later than 270 days after the date of enactment of this Act, the Commission shall adopt final guidance permitting, for the purposes of section 240.15c3–3(b) of title 17, Code of Federal Regulations, a broker or a dealer to perform, within the same legal entity, both trading and custodial activities relating to fully paid and excess margin digital assets, including virtual currency and digital assets that are securities or may represent ownership of securities, in addition to traditional securities, client funds, and other assets permitted by the Commission to be within the control of a broker or dealer.
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  • 15 USC 80b–2(a)
  • 15 USC 80b–1
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Sec. 304
Custody and customer protection rules
Cite15 USC 80b–2(a)
Cite15 USC 80b–1
Cites 2Cited by 0 across 0 sources
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