AI-assisted research summary: A fiduciary financial institution may act as custodian for an asset custody account, but must meet specified compliance, IT, AML, and fiduciary-duty requirements when doing so.
9-2313. Custodial services; requirements. (a) A fiduciary financial institution may serve as a custodian, which may include serving as a qualified custodian, as defined by the United States securities and exchange commission in 17 C.F.R. § 275.206(4)-2, of an asset custody account. In performing custodial services under this section, a fiduciary financial institution shall: (1) Implement all accounting, account statement, internal control, notice and other standards specified by applicable state or federal law and rules and regulations for custodial services; (2) maintain information technology best practices relating to alternative assets held in custody; (3) fully comply with applicable federal anti-money laundering, customer identification and beneficial ownership requirements; and (4) take other actions necessary to comply with the requirements of this section. (b) Alternative asset custody accounts over which a fiduciary financial institution serves as a custodian or qualified custodian are not depository liabilities or assets of the fiduciary financial institution. (c) In performing custodial services under this section: (1) A fiduciary financial institution shall be a fiduciary and shall be subject to the duties and standards of utmost care and loyalty that are associated with serving as a fiduciary; (2) a fiduciary financial institution shall be deemed to be exercising fiduciary powers; and (3) all income earned by a fiduciary financial institution and derived from performing custodial services shall be deemed to be income derived from the exercise of fiduciary powers. History: L. 2021, ch. 80, § 13; July 1.