Custody of customer assets
In Trade and Geopolitical Risk, custody of customer assets sits at the intersection of sanctions compliance, cross-border transfer restrictions, and broker-dealer obligations enforced by regulators including the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, and the European Securities and Markets Authority. Firms operating across jurisdictions are actively auditing their custodial arrangements against ESMA's 2022 guidelines on delegation and third-party custody chains, while the SEC's customer protection rule under Rule 15c3-3 continues to draw scrutiny when trade-finance exposures complicate the definition of a 'possession or control' obligation. Sanctions-related asset freezes tied to geopolitical events have forced compliance teams to revisit whether custodial agreements with foreign sub-custodians survive an OFAC designation overnight.
Watch
- SEC Rule 15c3-3 interpretations where trade-finance assets blur possession-or-control lines
- ESMA third-party custody delegation guidelines and pending member-state implementation gaps
- OFAC General License carve-outs affecting frozen asset custody obligations in sanctioned jurisdictions
- CFTC proposed amendments to Part 190 bankruptcy rules for customer segregated accounts
- Cross-border asset repatriation orders issued under new EU foreign subsidies enforcement actions
Recent material activity in Trade & Geopolitical Risk
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OFAC designates 14 entities linked to Russian defense procurement network
The Treasury Department's Office of Foreign Assets Control added 14 entities and 6 individuals to the Specially Designated Nationals list for their roles in procuring critical technology components for Russia's defense i…
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BIS adds 22 Chinese semiconductor entities to Entity List for advanced chip diversion
The Bureau of Industry and Security expanded export controls targeting Chinese semiconductor entities found to be diverting advanced computing chips through third-country intermediaries. New license requirements affect i…
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