The new guidance, which supersedes one issued in January 2023, reiterates sound custody and disclosure practices and details the department’s expectations regarding sub-custodians, DFS said in a Tuesday press release.
It covers the department’s expectations around acceptable sub-custodians, sub-custodial service agreements, asset custody frameworks that protect the interests of customers, permissible uses of customer assets, and custody and disclosure practices to protect customers in the event of insolvency, according to the release.
“As we see the use of more sub-custodial relationships in the digital asset space, this guidance provides additional clarity on how those relationships should be governed,” New York DFS Superintendent Adrienne A. Harris said in the release.
On Monday (Sept. 29), New York Governor Kathy Hochul announced in a press release that Harris will be leaving the DFS and that the department’s executive deputy superintendent of the research and innovation division, Kaitlin Asrow, will become acting superintendent of the DFS on Oct. 18.
DFS said in the release that Hochul nominated Harris for the role in August 2021 and that Harris is the longest-serving superintendent.
“I’d like to thank Superintendent Harris for her four years of service at DFS, working every day to make our financial system work for New Yorkers, while also rebuilding the Department into a regulator fit for the financial capital of the world,” Hochul said in the release.
Of Asrow, Hochul said: “Between her time at the Federal Reserve, Financial Health Network, and within DFS, Kaitlin is well suited to lead the Department into the future, expanding access to affordable financial services for all New Yorkers while ensuring our great state continues to be a center for responsible innovation.”
Harris told the Financial Times in a report published Tuesday that she had always planned to step down from the superintendent role after four years.
In a May 2022 interview with PYMNTS CEO Karen Webster, Harris said consumer education is critical when it comes to bringing new products and services into the field.
“We don’t want to front-run innovation, but we want to stay close enough so that we can prevent harm — and it’s always a balance we’re trying to strike,” Harris said.
