SEC Proposes to Modernize Custody Rules and Further Expand Retail Investor Access to Private Funds and Alternative Investments

Executive Summary

In a significant step towards advancing what SEC Chairman Paul Atkins has described as “responsible retailization,” the U.S. Securities and Exchange Commission (the “SEC”) voted on September 30, 2026 to propose two sets of rule amendments (“Proposed Retail Access Rules”) designed to expand retail investor access to alternative investment strategies through “regulated funds” (registered investment companies such as mutual funds, exchange-traded funds and other registered closed-end funds (“RICs”) and business development companies (“BDCs”)).[1] The first proposal would expand the ability of investment advisers to receive performance-based compensation under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).[2] The second proposal would modernize the regulatory framework for interval funds under the Investment Company Act of 1940, as amended (“Investment Company Act”) and expand the availability of multiple share class structures to regulated closed-end funds, including interval funds and BDCs.[3]

Further, on October 1, 2026, the SEC proposed new rules and rule amendments which would provide a regulatory framework under the Advisers Act and the Investment Company Act for custody of crypto assets associated with client portfolios, while further modernizing the existing Advisers Act Custody Rule to address a number of interpretive and compliance points affecting private fund sponsors and other registered investment advisers (the “Proposed Modernized Custody Rule”).[4] Comments on all three proposals are due 60 days after publication in the Federal Register.

Key Takeaways for Investment Fund Sponsors

• Broadened Qualified Client Definition. Under the Proposed Retail Access Rules, investment fund sponsors and separately managed account advisers would have significantly greater latitude to charge performance fees to a broad population of retail investors previously ineligible for such arrangements. The SEC proposes to amend the “qualified client” definition under Advisers Act Rule 205-3 by replacing the net worth test and assets-under-management test with the current “accredited investor” standard under Regulation D of Rule 506, and without imposing heightened accredited investor verification requirements on advisers (a “reasonable belief” standard would be in effect). For private fund sponsors, the practical effect will be to broaden their ability to receive performance-fee compensation from accredited investors that are limited partners, members or similar beneficial owners of Investment Company Act Section 3(c)(1) private funds that are formed after the effective date of any adopted rules.
• Expanded Retail Access to Regulated Funds. The Proposed Retail Access Rules would permit registered advisers to receive performance-based compensation from any RIC or BDC without taking into account the qualifications of the fund’s underlying investors, and subject to certain governance and disclosure requirements. The Proposed Retail Access Rules would also provide significantly greater flexibility around the repurchase process (including frequency of permitted repurchase offers) and related liquidity requirements for interval funds under the Investment Company Act. Finally, the Proposed Retail Access Rules would expressly permit unlisted registered closed-end funds and BDCs to offer multiple share classes with varying distribution and service fee structures, replacing an SEC exemptive relief order process.
• New Self-Custody Pathway for Crypto Assets. The Proposed Modernized Custody Rule would effectively replace existing Advisers Act Rule 206(4)-2 by redesignating the Custody Rule as new Advisers Act Rule 223-1, and as part of a suite of modernizations, would establish a framework under which registered investment advisers could self-custody crypto assets for advisory clients (or maintain such crypto assets with a state trust company) subject to certain safeguarding conditions.
• Eased Custody Rule Compliance Burdens. The Proposed Modernized Custody Rule, and the views expressed by the SEC Staff in the proposing release, include a number of key modifications that introduce flexibility and address longstanding compliance issues under the existing Custody Rule that have been raised by market participants. Of particular import for private fund sponsors are the following proposals:
  • Removal of the PCAOB Requirement. Private fund sponsors would no longer be required to select only auditors that are registered with, and subject to inspection by, the Public Company Accounting Oversight Board (the “PCAOB”) in order to meet the audit exception of the Custody Rule for pooled investment vehicles.
  • S. GAAP Audits Only for U.S. Funds. The proposed rule builds upon and further clarifies existing SEC Staff guidance regarding when foreign-organized funds are required to have their audited financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Under the Proposed Modernized Custody Rule, pooled investment vehicles’ audited financial statements would be required to be prepared in accordance with U.S. GAAP. However, for either (i) non-U.S. domiciled funds or (ii) funds whose general partner or manager has its principal office and place of business outside of the U.S. (“Foreign PIVs”), there would be flexibility to prepare audited financial statements for the Foreign PIVs in accordance with standards other than U.S. GAAP so long as the financial statements contain substantially similar information to a U.S. GAAP audit, and if there are any material differences, a reconciliation is delivered to the U.S. investors of such Foreign PIV, along with the required audited financial statements.
  • Fund of Funds Relief. The proposed rule would codify existing SEC Division of Investment Management Staff guidance on the application of the 120-day deadline for delivery of audited financial statements to investors of funds of funds, extending such deadline to 180 days and also establishing a 260-day delivery deadline for a fund of funds of funds.
  • Audit Delivery Delays. The SEC Staff set forth guidance under which private fund sponsors would not be deemed to violate the Custody Rule’s specified timeframes for delivery of audited financial statements to investors, where there are “reasonably unforeseeable circumstances” (e.g., technology issues, force majeure events) and audited financials are delivered promptly once those circumstances are resolved and the private fund sponsor reasonably believed that the audited financial statements would have otherwise been distributed in a timely manner.
  • Delivery of Audits to Investor Representatives. In an expansion of the existing Custody Rule, which permits notices and account statements to be delivered to independent representatives designated by clients, pooled investment vehicle investors will be able to designate an independent representative to receive distributed fund audits.
  • Stub Period Audits for Newly Formed Funds. Under the existing Custody Rule, pooled investment vehicles that are formed and have an initial closing during the latter half of a calendar year must still obtain an annual audit for the “stub” period following the closing at which the vehicle formally became a “client” with associated assets, and therefore subject to the Custody Rule. The Proposed Modernized Custody Rule seeks to address this by permitting managers of funds formed in the final calendar quarter of a preceding year to deliver unaudited financial statements to investors within 90 days of the end of the first “stub” period year and incorporating this “stub” period in the subsequent audit of the fund’s first full fiscal year of existence.
  • Custody Treatment of Escrow Accounts for Portfolio Company Sale Proceeds. The SEC Staff provide welcome clarification to private equity fund sponsors who have grappled with the treatment under the existing Custody Rule of limited-purpose escrow accounts for portfolio company sale proceeds, which can typically be comprised of commingled amounts attributable to both investing client funds as well as those associated with third parties (e.g., a co-sponsor). Under the Proposed Modernized Custody Rule, sponsors would be permitted to maintain client funds in seller escrow accounts that are comprised of both client and non-client funds if certain specified protections are met, including covering escrow amounts in the fund’s audit.
  • Disclosure on Fund Tokenization. In an effort to promote investor transparency and obtain greater SEC visibility into the growth of tokenized private funds (whose shares or limited partner interests take the form of a crypto asset and are digitally maintained), the SEC Staff propose to add a question on Form ADV Part 1A (Section 7.B.1 of Schedule D) that asks whether a reported private fund, including any series or class involved, is a tokenized fund. The question would apply to both registered and exempt reporting advisers.

Background

Performance-Based Compensation Under the Advisers Act

Section 205(a)(1) of the Advisers Act generally prohibits investment advisers registered, or required to be registered, with the SEC from receiving compensation based on a share of capital gains or capital appreciation of a client’s account.[5] Rule 205-3, however, exempts advisory contracts with “qualified clients” from the performance-fee prohibition, which include: (a) clients that meet a minimum net worth or assets-under-management requirement; (b) clients that are “qualified purchasers” under the Investment Company Act; and (c) clients that are certain executive officers or employees of an adviser who actively participate in the investment activities of such adviser. Following the inflation adjustment effective June 29, 2026, the current qualified client thresholds are: (a) $1.4 million in assets under management with the adviser and (b) $2.7 million net worth (excluding the value of the client’s primary residence).[6] Further, when identifying who is considered a “client” for purposes of Rule 205-3, the “look-through” provision of Rule 205-3(b) under the Advisers Act considers each equity owner of a Section 3(c)(1) fund or regulated fund as being a client. Each such equity owner must itself meet the “qualified client” definition in order for the investment adviser to enter into an advisory contract that includes a performance fee arrangement[7] (whereas a Section 3(c)(7) fund is excepted from the performance-fee prohibition under Section 205(b)(4) and is itself the “client” for purposes of Rule 205-3).[8]

Interval Funds and Closed-End Fund Share Classes

Rule 23c-3 under the Investment Company Act permits registered closed-end funds to operate as “interval funds” by making periodic repurchase offers at net asset value (“NAV”) every three, six or 12 months. Repurchase offer amounts made pursuant to a fundamental policy must be between 5% and 25% of outstanding common stock, and, if an offer is oversubscribed, the fund may elect to repurchase up to an additional 2% of outstanding common stock. Under the current rule, an interval fund generally must maintain liquid assets equal to at least 100% of the repurchase offer amount from the repurchase offer notification date through the repurchase pricing date.[9]

Since 2007, the SEC has issued approximately 230 multi-class exemptive orders to unlisted, continuously offered regulated closed-end funds.[10] Because Rule 18f-3 currently permits multiple share classes only for open-end funds, closed-end fund sponsors have generally relied on individual exemptive orders, adding time and cost to product launches.

The Existing Custody Rule

Advisers Act Rule 206(4)-2 requires an investment adviser that is registered, or required to be registered, with the SEC and has custody over client funds or securities to take certain steps to safeguard them. An adviser has “custody” if it holds client funds or securities, directly or indirectly, or has any authority to obtain possession of them. Subject to certain exceptions, the rule requires an adviser to maintain client funds and securities with a “qualified custodian,” notify clients in writing of where their assets are held, have a reasonable basis that the qualified custodian sends account statements, at least quarterly, to each client and obtain an annual surprise examination by an independent public accountant verifying the assets. Advisers to limited partnerships (or limited liability companies or other types of pooled investment vehicles), generally satisfy the surprise examination, notice and account statement requirements of the Custody Rule by distributing instead annual audited financial statements to investors within 120 days of fiscal year end. In 2023, the SEC proposed to expand the Custody Rule, including to cover crypto assets, but withdrew that proposal in June 2025.[11]

The Performance-Based Compensation Proposal

The SEC proposes to amend Advisers Act Rule 205-3, with conforming amendments to Rules 203A-3 and 204-3 and Form ADV, and amendments to Investment Company Act Forms N-1A, N-2 and N-CSR. The proposal has three principal components:

Revised Qualified Client Definition

The SEC proposes to amend the “qualified client” definition by removing the net worth test and assets-under-management test and including as part of the definition any natural person or company (other than a “private investment company”) that an investment adviser reasonably believes is an “accredited investor” within the meaning of Regulation D at the time of entering into an investment advisory contract with such person or company. Under the amended definition, any natural person or company who an investment adviser reasonably believes meets the accredited investor definition would be eligible to enter into performance-fee arrangements with such investment adviser in compliance with Section 205(a)(1) of the Advisers Act and Rule 205-3 promulgated thereunder.

By replacing the net worth test and assets-under-management test with the “accredited investor” standard in the “qualified client” definition, the SEC stated that this would harmonize the regulatory framework governing access to private funds, for example, by enabling investors who qualify as accredited investors but otherwise do not meet the existing definition of “qualified client” to invest in Section 3(c)(1) funds where such funds have performance fee arrangements.

If the proposed amendments to the “qualified client” definition are adopted, natural persons who would not otherwise have met either the $1.4 million assets-under-management test or $2.7 million net worth test but meet one or more of the accredited investor categories would become eligible to invest in funds that have performance fee arrangements. With respect to entities, the SEC expects the impact to be minimal given that entities would typically meet the assets-under-management test and/or net worth test of the “qualified client” definition.

In connection with the qualified client definition, the proposal would also expand the “high net worth individual” definition in Rules 203A-3 and 204-3 and conform Form ADV accordingly.

Performance-Based Compensation for Regulated Funds

The proposal would expand the ability of investment advisers to receive performance-based compensation from RICs and BDCs, subject to three conditions:

• 20% Cap. The performance-based fee may not exceed 20% of the regulated fund’s net capital gains or appreciation over a specified period.
• Fund Governance. The board of directors of the regulated fund must satisfy the fund governance standards set forth in Rule 0-1(a)(7) under the Investment Company Act.
• Annual Review. As part of a regulated fund’s annual review or approval of an investment advisory contract, the fund’s board of directors, including a majority of independent directors, must determine that the performance-based compensation arrangement is in the best interest of the fund and its shareholders and must make specific findings regarding the arrangement’s appropriateness, structure and investor protection features.

This framework would be a significant departure from the current regime. At present, the principal statutory route available to RICs is the narrow “fulcrum fee” exception under Section 205(b)(2) of the Advisers Act, which requires fees to increase and decrease symmetrically relative to a benchmark (separately, under Rule 205-3, a RIC’s adviser may receive a performance fee only if each of the fund’s equity owners is a qualified client). BDCs may charge performance fees of up to 20% of net realized capital gains under Section 205(b)(3). The proposal would create a much broader avenue for advisers to offer hedge fund- and private equity-style incentive compensation through registered fund structures, provided the specified governance and fee cap conditions are met.

Enhanced Disclosure Requirements

The SEC proposes to amend Forms N-1A, N-2 and N-CSR to require separate disclosure of all performance-based compensation paid by registered funds to their investment advisers, including compensation based on interest, ordinary income or dividends. These disclosure requirements are designed to ensure that investors and fund boards have a clear understanding of the total compensation flowing to the adviser under performance-based arrangements.

The Interval Fund and Closed-End Fund Share Class Proposal

Interval Fund Modernization

The SEC proposes a series of amendments to Investment Company Act Rule 23c-3 to modernize the interval fund framework, including:

• Extended Deferral of First Repurchase Offer. The current rule requires a fund to have its initial repurchase request deadline occur no later than two periodic intervals after the later of the effectiveness of its registration statement or the shareholder vote adopting its fundamental policy. The proposal would permit a fund to defer its initial repurchase request deadline for up to two years, regardless of the length of its periodic interval, to more effectively establish operations and better accommodate longer-term investment strategies such as private equity and venture capital.
• Monthly Periodic Intervals. In addition to the existing three-, six- and 12-month intervals, interval funds would be permitted to offer monthly repurchase intervals. The SEC has previously granted exemptive orders permitting monthly repurchases, and the proposal would largely codify existing exemptive relief, though certain terms (including the shareholder notice period and the repurchase offer amount) would differ from the conditions in those orders.
• More Frequent Discretionary Repurchases. The current restriction limits discretionary repurchases to no more than once every two years measured from the date of the last discretionary repurchase offer. The proposal would permit one every year measured from the date of the last discretionary repurchase offer, at the fund’s election, including for non-interval regulated closed-end funds that elect to make a discretionary offer.
• Deferred Sales Load Deductions. Currently, only repurchase fees of up to 2% may be deducted from repurchase proceeds, so funds seek exemptive relief to charge deferred sales loads. The proposal would permit all interval funds to deduct deferred sales loads (i.e., early withdrawal charges) from repurchase proceeds, subject to the conditions that apply to open-end funds (compliance with Rules 6c-10 and 11a-3 and, where a load is waived or varied, Rule 22d-1).
• Principles-Based Liquidity Management. The existing requirement that an interval fund hold at least 100% of the repurchase offer amount in assets that can be sold in the ordinary course at approximately their valued price from the notice date to the pricing date would be replaced with a principles-based approach. Under the proposed framework, funds would be required to manage their liquidity so that they can satisfy repurchase requests without selling investments at a price that deviates significantly from their value.
• Additional Amendments. The proposal would also simplify and clarify the process for determining the repurchase pricing date, clarify the treatment of oversubscribed offers, shorten the minimum shareholder notice period from 21 to 14 days, remove the grandparent clause for funds that made repurchase offers before May 14, 1993, and eliminate obsolete filing and signature language in Form N-23c-3.

Multiple Share Classes for Regulated Closed-End Funds and BDCs

The proposal would amend Rule 18f-3 under the Investment Company Act to permit regulated closed-end funds, including interval funds, and BDCs to issue multiple share classes, generally consistent with the framework available to open-end funds. The proposal would also amend Rule 17d-3 to allow closed-end funds and their affiliates to enter into asset-based distribution and service fee arrangements. The proposal would also add Form N-2 and Form N-CEN disclosure and reporting requirements for multiple share class structures and would rescind most of the related exemptive orders, with a one-year compliance period after the effective date.

Related Development: Expanding Accredited Investor Certifications, Designations & Credentials

In addition to the proposed rules and amendments, the SEC issued notices seeking comment on additional professional designations, certifications and credentials that could qualify natural persons as accredited investors under Rule 501(a)(10) of Regulation D. Among the designations under consideration are: passage of a FINRA-developed accredited investor examination; a CPA license; the CFA charter; the CFP certification; and Series 79 and Series 86/87 licenses. If adopted, these additional accredited investor pathways could further broaden the universe of natural person investors eligible for performance-fee arrangements under the proposed amended qualified client definition. The SEC Staff also noted that expanding the professional designations available under Rule 501(a)(10) might be less costly for issuers in Rule 506(c) offerings as each of the additional professional designations should be easier to verify than other prongs of the accredited investor definition for natural persons.[12]

The Proposed Modernized Custody Rule

The SEC proposes a series of amendments to the Custody Rule under the Advisers Act (Rule 206(4)-2) and the Investment Company Act (Rules 17f-1, 17f-2, 17f-4, 17f-5 and 17f-6) to better address current industry practices and feedback, including:

• Redesignation to Section 223. The proposal would redesignate Advisers Act Rule 206(4)-2 as new Rule 223-1, aligning it with Section 223 of the Advisers Act. As a consequence, the statutory basis for the rule would shift away from the antifraud provisions of Section 206(4) and toward congressional intent to strengthen safeguarding requirements. The SEC Staff emphasize that advisers’ fiduciary obligations regarding custody would still apply despite the change in statutory basis. Unlike the withdrawn 2023 Safeguarding Proposal, which also used the Rule 223-1 number, this proposal keeps the rule limited to client funds and securities, apart from the provisions governing custody of crypto assets.
• Audit Provision Amendments. The current rule permits an adviser to a pooled investment vehicle to deliver audited financial statements within 120 days of fiscal year end in lieu of the surprise examination, notice and account statement requirements. The proposal (which would formalize positions previously found in guidance from the SEC Division of Investment Management Staff) would require audited financial statements for U.S.-based pooled investment vehicles to be prepared in accordance with U.S. GAAP (permitting non-U.S. GAAP standards to be used, subject to reconciliation and material differences disclosure to U.S. investors, for Foreign PIVs), extend the audited financial statement delivery deadline to 180 days for funds of funds and 260 days for funds of funds of funds, permit delivery to an investor’s independent representative, and give vehicles formed within the last 90 days of a fiscal year the option to deliver unaudited first-period statements and audited first- and second-year statements after fiscal year two. The proposal also expresses the SEC Staff view that missing an audit delivery deadline because of reasonably unforeseeable circumstances, such as a technology failure or force majeure event, generally would not violate the Custody Rule where the adviser reasonably believed it would meet the deadline and delivers the audited financials promptly once the situation is resolved.
• Discretionary Trading Authority. Proposed Rule 223-1(b)(9) would exempt funds and securities over which an adviser has custody because of its discretionary trading authority, provided that the adviser: (i) trades only from and into designated client accounts in the client’s name, or has the issuer record the transfer in the client’s name (including in respect of bank loans and privately offered securities), (ii) has no authority to transfer client funds and securities to itself, to an account it or a related person controls, or to any non-client account, unless the client directs the transfer in connection with the trading and (iii) separately complies with the rule for any other source of custody, such as fee deduction authority, a SLOA or a broad power of attorney. This provision addresses the treatment of both delivery-versus-payment (“DVP”) and non-DVP trading, and in the release, the SEC Staff also warn that broadly drafted grants of authority could be treated as a general power of attorney that confers custody.
• Inadvertent Custody. The proposal further addresses previous SEC Staff guidance regarding inadvertent custody scenarios and adds an exception to the Custody Rule.[13] Under the current rule, an adviser may have custody over a client’s funds or securities simply because the custodian’s standard form executed by a client (that an adviser is not party to) grants the adviser access to a client’s funds or securities in a manner other than as contemplated by the advisory agreement with such client. The proposal would except an adviser from compliance with the Custody Rule if (a) the adviser did not recommend, request or require a custodian’s selection and (b) either (i) the adviser has no copy of the custodial agreement and no knowledge or reason to know it grants such authority or (ii) on learning that the agreement grants such authority, the adviser promptly notifies the client and custodian in writing, repudiates the authority and asks that it be removed or replaced. Advisers would not have to review every client custodial agreement. However, the SEC Staff expressed the view that advisers relying on the exemption should have policies and procedures for reviewing the agreements they have access to, disavowing unwanted authority and requesting amendments. This exemption may ultimately be of limited use to large retail investment management platforms that routinely direct clients to a particular custodial platform.
• Commingled Seller Escrow Accounts. The proposal would articulate, as a Commission view, the 2014 position of the staff of the Division of Investment Management[14] that an adviser may maintain client funds associated with the sale of a portfolio company in a commingled seller escrow account if certain conditions are met, including that the client is a pooled investment vehicle that relies on the audit provision, the vehicle’s share of the escrow is covered in its financial statements, the escrow is for the limited purpose of indemnification or a purchase price adjustment associated with the sale or merger of a portfolio company, the escrow period is agreed-upon between buyers and sellers, the escrow account is maintained at a qualified custodian and the sellers’ representative is contractually required to promptly distribute remaining funds to the sellers under a predetermined formula.
• Elimination of the PCAOB Requirement. The proposal eliminates the requirement for the auditors and accountants of a pooled investment vehicle to be registered with and subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”), so long as they continue to be “independent public accountants” (as such term is defined in the Custody Rule).[15] The removal of the PCAOB registration and inspection requirement also extends to the surprise examination and internal control report that is required when the adviser or a related person acts as a qualified custodian.
• Crypto Assets Custody. The proposal would provide a clear regulatory framework for the custody of crypto assets, giving advisers a compliance pathway where qualified custodians are unavailable. Under the current Custody Rule, client funds and securities, including crypto assets, must be held by a qualified custodian, and few qualified custodians support a broad range of crypto assets. The proposal would add two new options for advisers: (i) adviser self-custody, where an adviser can hold any portion of the private keys, subject to conditions such as a written, asset-by-asset determination (made before taking custody and at least quarterly thereafter) describing the basis for believing no qualified custodian will maintain the relevant crypto assets, safeguarding, cybersecurity, internal control report and account statement requirements; and (ii) custody with a state trust company, subject to annual diligence and segregation of client assets.

Next Steps

All proposals will be published in the Federal Register, opening a 60-day public comment period. We encourage fund sponsors and other interested parties to consider the following:

• Consider Registered Fund Platform Opportunities. Private fund sponsors that have considered launching registered fund or BDC products, and existing registered fund platform sponsors, should evaluate whether the proposed performance-fee framework and modernized interval fund rules would make regulated fund vehicles commercially viable for their strategies. In particular, the combination of performance-based compensation and extended initial deferral of repurchase offers could make interval funds a more attractive vehicle for fund sponsors. Such sponsors should also consider discussing with their distribution partners how the proposals would impact the fundraising process, both mechanically as well as expansion to broader sets of prospective investors.
• Prepare for Updated Investor Qualification Requirements. If the revised qualified client definition is adopted, sponsors of Section 3(c)(1) funds and managers using performance-fee arrangements in SMAs should plan to update investor questionnaires and qualified client representations in subscription documents and advisory agreements, in order to further reflect the addition of the accredited investor standard and the removal of the net worth and assets-under-management tests. Such private fund sponsors and managers can consider performing an inventory of existing investor and client arrangements to identify where performance fees could be permissible (subject to agreement amendments) if the rules are adopted.
• Industry Discussion and Comment Submission. Given the breadth and significance of these proposals, we encourage fund sponsors, investors and other market participants to assess the impact of the Proposed Retail Access Rules and Proposed Modernized Custody Rule and engage in discussion with counsel and trade groups. The SEC Staff has requested comments on a number of conceptual and operational points associated with the proposals, and based on the current posture of the SEC, we expect the SEC Staff to be receptive to industry feedback and alternatives if identified.

* * *

[1] SEC Press Release No. 2026-96 (September 30, 2026). The proposals further implement the President’s Executive Order on Democratizing Access to Alternative Assets for 401(k) Investors.

[2] U.S. Securities and Exchange Commission, Investment Adviser Performance-Based Compensation Modernization, Release No. 33-11443; 34-106533; IA-7022; IC-36350; File No. S7-2026-28 (September 30, 2026), available here.

[3] U.S. Securities and Exchange Commission, Interval Fund Modernization; Expansion of Multiple Share Class to Registered Closed-End Management Investment Companies and Business Development Companies, Release No. 33-11444; 34-106534; IC-36351; File No. S7-2026-34 (September 30, 2026), available here.

[4] U.S. Securities and Exchange Commission, Adviser and Regulated Fund Custody Rules; Crypto Custody Rules, Advisers Act Release No. IA-7023, Investment Company Act Release No. IC-36353 (Oct. 1, 2026), available here.

[5] See Section 205(a)(1) of the Advisers Act (15 U.S.C. 80b-5(a)(1)).

[6] See 17 CFR § 275.205-3. See also Paul, Weiss, SEC Increases "Qualified Client" Dollar Amount Thresholds (May 7, 2026), available here.

[7] See Rule 205-3(b) under the Advisers Act.

[8] See Section 205(b)(4) of the Advisers Act (15 U.S.C. 80b-5(b)(4)).

[9] See 17 CFR § 270.23c-3(a)(1), (a)(3), (b)(5), (b)(10).

[10] Interval Fund Proposing Release, supra note 3, at 24.

[11] U.S. Securities and Exchange Commission, Safeguarding Advisory Client Assets, Advisers Act Release No. 6240 (Feb. 15, 2023) [88 FR 14672 (Mar. 9, 2023)]; Withdrawal of Proposed Regulatory Actions, Advisers Act Release No. 6885 (June 12, 2025) [90 FR 25531 (June 17, 2025)].

[12] See, e.g., Release No. 33-11445, at 29; Release No. 33-11446, at 26.

[13] Inadvertent Custody: Advisory Contract Versus Custodial Contract Authority, IM Guidance Update No. 2017-01 (February 2017).

[14] Private Funds and the Application of the Custody Rule to Special Purpose Vehicles and Escrows, IM Guidance Update No. 2014-07 (June 2014).

[15] See Rule 206(4)-2(d)(3) under the Advisers Act (proposed to be redesignated as rule 223-1(d)(8) and proposed rule 17f-8(c)).