Qualified Custodian
Custody & Settlement
Definition
A qualified custodian is a regulated bank, broker-dealer, futures commission merchant, or eligible foreign financial institution that can hold client assets under custody rules.
Why it matters
Custody determines who controls assets, how ownership is evidenced, and what happens if an adviser, platform, or issuer fails.
Common misconceptions
- •A dashboard balance is not the same as custody with a qualified custodian.
- •Crypto custody and securities custody can involve different legal and operational regimes.
Technical details
Custody Review
Review account titling, segregation, control agreements, statements, audit rights, private-key controls, insurance, sub-custodians, and insolvency treatment.
RWA Context
Tokenized asset structures often separate token administration from custody of off-chain securities, cash, loans, or other underlying assets.