1. On October 28, 2025, SEC Chairman Paul Atkins described the agency’s handling of off-channel communications over the last couple of years as “not the way a regulator should act.” Chairman Atkins was responding to a question posed by the Securities Industry and Financial Markets Association about his thoughts on “e-communication, off-channel, the whole issue around that — the uncertainty.” Chairman Atkins stated “We have to address that.”
2. On October 24, 2025, President Donald Trump announced he will nominate Mike Selig, a longtime crypto ally and chief counsel of the SEC’s Task Force, to chair the Commodity Futures Trading Commission. The nomination is seen as a significant move by the Trump administration to reshape financial regulation around digital innovation and market competitiveness. Selig’s experience is expected to be crucial in navigating market structure legislation that would provide clearer rules for crypto assets. The nomination still requires confirmation by the Senate. However, a government shutdown has created a hurdle, and the nomination’s success hinges on the legislative progress being made.
3. On October 21 2025, Guy Gentile, a onetime ex-FBI informant and Bahamas broker, was ordered to pay the SEC $19M for operating as an unregistered broker-dealer in the US. Gentile and SureTrader were jointly and severally liable for more than $16.5 million in ill-gotten gains plus prejudgment interest. Gentile additionally owes $520,200 in disgorgement, more than $231,000 in prejudgment interest, and a nearly $1.89 million civil penalty. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25058 and https://www.sec.gov/files/litigation/complaints/2021/comp25058.pdf
4. On October 14, 2025, the Retirement Investment Choice Act was introduced to codify an Executive Order to expand access to alternative assets for investors in 401(k) plans. Alternative assets, such as private equity, real estate, and cryptocurrencies, are typically less accessible to retail investors than traditional stocks and bonds. The Act is intended to reduce regulatory and legal risks that have historically prevented fiduciaries from offering alternative investments in employer-sponsored retirement plans. https://downing.house.gov/media/press-releases/downing-introduces-bill-democratize-access-alternative-assets-401k-investors
5. On October 9, 2025, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the prudential regulators issued joint guidance clarifying regulatory expectations for suspicious activity reports (SARs). The guidance, in the form of a Frequently Asked Questions (FAQ) document, which clarifies expectations of regulators based on existing rules relating to structuring SARs, continuing activity reviews, and documentation expectations around a financial institution’s decision not to file a SAR. https://www.fincen.gov/system/files/2025-10/SAR-FAQs-October-2025.pdf
6. On October 3, 2025, the NASAA issued a memo addressing the 2025 end of year IAR CE processing procedure and associated important dates. The NASAA advised that additional email notifications will be send to IARs who have a FinPro account and an outstanding IAR CE requirement on November 30th and December 15th. The NASAA advised that the last day to submit course completion rosters for guaranteed 2025 processing will be December 26th and that the CRD system will stop processing rosters for 2025 renewals on December 26th (CRD System Shutdown). All course rosters submitted before the deadline will be processed and included in the 2025 renewal process. Rosters submitted after the deadline will continue to be processed but will not be considered as part of the 2025 renewal process. Importantly, this will impact IARs who are deficient two years (e.g. 2024 and 2025) and are in a CE Inactive CE status at the time of the CRD System Shutdown. IARs with a CE Inactive status on December 26 will immediately fail to renew (FTR) in IAR CE states. For rosters will continue to be accepted by the system if submitted between December 26 and December 31 and CE statuses will continue to update based on course completions after the CRD Shutdown. However, registration statuses for individuals who are CE Inactive on December 26 will immediately advance to Fail to Renew (FTR). If an individual FTR due to deficient CE on December 26 their registration status will not update and will remain FTR until the CE deficiency is cleared and a new U4 is filed to reregister with the state. If an IAR waits to complete their CE in the Shutdown downtime, their 2026 registration may be impacted.
7. On October 1, 2025, the SEC issued an order staying all pending administrative proceedings due to a lapse in appropriations. The order applies across the docket and pauses any newly initiated administrative matters during the lapse. The stay tolls all filing and scheduling deadlines for the duration of the lapse and allows parties to request that the stay be lifted only for emergencies involving the protection of property or human life. https://www.sec.gov/files/litigation/opinions/2025/33-11392.pdf
8. On October 1, 2025, the U.S. government entered a shutdown following a lapse in appropriations. As in previous shutdowns, federal agencies including the SEC have published contingency plans outlining how their operations will be affected. The SEC confirmed that the majority of their staff will be furloughed until a new budget is passed. According to the SEC’s Operations Plan, only 393 of its 4,289 employees will remain active to run essential services during the shutdown. Key takeaways are:
- Registration and exemptive relief requests are paused. Expect delays.
- Examinations are suspended but filing deadlines remain in effect.
- Enforcement and market monitoring continue with limited staffing.
9. On October 1, 2025, the SEC announced no-action relief for registered investment advisers and registered funds wishing to use state-chartered trust companies as custodians for crypto assets and related cash or cash equivalents. The relief clarifies that, subject to certain conditions, the SEC Staff will not recommend enforcement if advisers or funds treat state trust companies as “banks” for purposes of custody under the Investment Advisers Act of 1940. The guidance is designed to expand portfolio options for advisers, particularly for clients seeking exposure to stablecoins, and supports the broader integration of state trust companies into the evolving crypto asset ecosystem.
10. In October, it was announced that the SEC is seeking to finalize a proposed rule change by April 2026 to enhance protections of client assets managed by investment advisers registered with the SEC. If adopted, the changes would amend Rule 206(4)-2, the “Custody Rule,” under the Investment Advisers Act of 1940 (the “Advisers Act”), and redesignate it as new Rule 223-1, the “Safeguarding Rule,” under the Advisers Act. The proposed Safeguarding Rule would have significant repercussions on industry participants, requiring advisers to enter into agreements with qualified custodians and imposing a wide array of new requirements on such qualified custodians. Below are some key elements of the proposed new Safeguarding Rule:
- Scope Expansion & Definition of Custody
- Beyond funds and securities: Under the current Custody Rule (Rule 206(4)-2), the focus is mainly on client funds and securities. The proposed safeguarding rule dramatically broadens this scope to cover all client assets—including tangible assets like real estate, loans, and commodities, as well as intangible ones such as crypto and other “positions” that may be reflected in an account but aren’t traditional securities. This means advisers will have to safeguard any form of client property they hold or can influence.
- Inclusion of discretionary authority: One of the most important expansions is that an adviser may be deemed to have custody solely by virtue of discretionary trading authority. Today, discretionary trading authority alone does not trigger “custody.” Under the proposal, however, simply having the authority to move assets on behalf of a client—even without direct possession of them—would impose full safeguarding obligations.
- Impact on crypto and alternative assets: The change is relevant for digital assets, which often sit outside traditional custodian frameworks. Advisers with authority to execute crypto trades (e.g., on behalf of clients via exchanges or wallets) may now be captured under custody rules, even if they never physically “hold” the crypto.
- Custodian Relationship & Assurances
- Contractual safeguards: The SEC is proposing to require advisers to obtain written agreements from qualified custodians (banks, broker-dealers, FCMs, certain foreign institutions) that guarantee critical protections. These agreements would need to confirm that custodians:
- Segregate client assets from their own.
- Clearly identify ownership of each asset.
- Prohibit the custodian from rehypothecating, pledging, or lending the assets without client consent.
- Provide regular account statements directly to clients or fund boards.
- Offer indemnification or other protections in case of custodian insolvency.
- Possession or control standard: A new requirement is that custodians maintain “possession or control” of client assets. This means the custodian—not the adviser—must hold the key to transfer or trade the assets.
- Recordkeeping, Reporting & Audit Requirements
- Enhanced recordkeeping: Advisers would be required to keep detailed, contemporaneous records of client asset transactions, holdings, and custodial arrangements. This includes documenting when and how assets were deposited, moved, or traded.
- Form ADV reporting: Advisers would need to provide more granular disclosures in Form ADV, particularly about custody arrangements and the identity of custodians.
- Audit regime: Private fund advisers, in particular, may face higher compliance costs because their fund audits would need to cover the expanded scope including the following areas: Valuation and ownership of non-traditional assets (e.g., crypto tokens, side-pocket illiquid loans, or real estate titles); proof of segregation and control by qualified custodians; and review of contractual arrangements with custodians to ensure they meet new safeguarding conditions.
- Surprise examination regime: The existing surprise examination requirement would be expanded. Auditors would have to review a broader universe of assets—not just funds and securities—and report more comprehensively on whether client assets are safeguarded appropriately.