Custody Rule Policy Template for Investment Advisers
Advisers Act Rule 206(4)-2
When the firm has custody, how client assets are held, how pooled vehicles meet the rule through audits, what to do with assets received by mistake, and how digital assets are handled.
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What the rule requires
An SEC-registered adviser with custody of client funds or securities must keep them with a qualified custodian, tell clients where they are held, and have a reasonable basis to believe the custodian sends clients account statements at least quarterly. It must also undergo an annual surprise examination by an independent accountant unless an exception applies.
Pooled vehicles can instead be audited annually and deliver audited financial statements to investors within 120 days of fiscal year end (180 days for a fund of funds). The Commission withdrew its 2023 safeguarding proposal in June 2025, so the rule as written still applies.
What the policy covers
The sections of Luna's model Custody and Safeguarding policy. Your draft includes only the clauses that apply to your firm.
- 1Scope and when the Firm has custody
- 2Pooled vehicle audit approach
- 3Privately offered securities
- 4Clients not using the audit approach
- 5Related persons as qualified custodians
- 6Inadvertent receipt of client assets
- 7Digital assets
- 8Private fund capital controls
- 9Records and review
What Luna asks you
A few of the questions that shape the draft:
- Whether the firm has custody of client assets
- Whether the firm or a related person acts as qualified custodian
- How the firm's funds are audited
- Whether the firm advises on digital assets
How drafting works
- 01Answer questions about your firm
Plain questions about how you operate. Where there is a common answer, Luna suggests it; where you are not sure, say so and it is flagged rather than assumed.
- 02Luna drafts the policy
Only the clauses that apply to your firm, in your firm's name, each traced to the rule or choice it comes from.
- 03Review what is left
Anything unanswered is marked in the text and listed for you, and the policy cannot be approved until each is settled.
- 04Edit, approve and roll out
It is your policy: edit it like any other, approve it, and have employees acknowledge it in the same place.
Read the source
Other policies
A summary of what the rule requires, current as of October 2026, so you can see what the policy covers. It is not legal advice. A policy drafted in Luna is your firm's draft to review, edit and adopt.