Spending Bill Kills SEC's New Custody Rule, Reg Best Execution
The Financial Services and General Government Appropriations bill, just released by the House Appropriations Committee, prohibits the Securities and Exchange Commission from using any funds to finalize or implement its new custody rule, the proposed Regulation Best Execution and the agency’s planned environmental, social and governance rule.
The spending bill, debated and passed Thursday by the Financial Services and General Goverment Subcommittee prohibits the SEC from enforcing the new custody rule, known as Safeguarding Advisory Client Assets, among other measures.
The revamped custody rule is aimed at crypto assets but greatly expands the pool of advisors who are subject to the rule and increases custody responsibilities. Gail Bernstein, general counsel for the Investment Adviser Association in Washington, a trade group for RIAs, called the extent of the changes “absolutely mind-boggling.”
The bill now heads to the full committee. It appropriates $2 billion for operating expenses at the SEC, which is $170.4 million below the level enacted in fiscal 2023.
In all, the bill allocates about $25 billion to the departments and agencies under its jurisdiction, which include the Treasury Department and several independent agencies.
