The SEC recently proposed amendments to the custody rule that may have an impact on real estate fund managers.
Asset management partner Eric Requenez told FundFire that, “most real estate fund managers previously weren’t subject to these rules, but they should start considering what it means for their business if the SEC ratifies the proposal in its current or a similar form.”
Eric shared that a property ownership transfer usually entails handing over deeds, often through local municipal bodies, which would require a custodian. Having a qualified custodian holding the deed and overseeing the process is essentially an extra layer of consent that managers would now have when making sales and purchases.
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