2025-22650Notice

SEC Keeps Foreign Asset Rule Rolling Smoothly

Published Date: 12/12/2025

Notice

Summary

The SEC wants to keep the rules that help investment funds safely store their foreign assets with trusted banks. Funds and their advisers must get risk reports and have contracts ensuring ongoing risk checks. This update keeps protections strong without adding new costs or deadlines.

Analyzed Economic Effects

5 provisions identified: 1 benefits, 4 costs, 0 mixed.

Estimated Total Annual Compliance Burden

The SEC estimates the total annual hour burden for all collection requirements of Rule 17f-7 is 151,152 hours and the total internal cost to the industry is approximately $49,083,792 per year.

Per-Custodian Workloads and Costs Estimated

The SEC estimates there are about 87 global custodians; each custodian will average 4 responses per year, each response taking 260 hours (1,040 hours per custodian annually), totaling 90,480 hours and an estimated $25,967,760 in internal cost for those custodians annually.

Funds May Use Vetted Foreign Depositories

Rule 17f-7 permits a fund, under certain conditions, to maintain its foreign assets with an eligible securities depository that meets specified minimum standards. The rule assigns responsibilities to the fund’s primary custodian and investment adviser to ensure ongoing safeguards for those foreign custody arrangements.

Custodians Must Provide Risk Analyses and Monitoring

Under Rule 17f-7, a fund or its adviser must receive from the primary custodian (or its agent) an initial risk analysis of the foreign depository arrangements, and the fund’s contract with its primary custodian must state that the custodian will monitor risks and promptly notify the fund or adviser of material changes. Primary and other custodians must agree to exercise at least reasonable care, prudence, and diligence.

Information Provided Under Rule Is Not Confidential

The SEC states that the information provided under Rule 17f-7 will not be kept confidential, meaning materials submitted under the rule may be publicly accessible or treated as non-confidential records.

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Key Dates

Published Date
12/12/2025

Department and Agencies

Department
Independent Agency
Agency
Securities and Exchange Commission
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