Third Party Custody Arrangement
SIO-10.2.3
For the purposes of Paragraph SIO-10.2.2(b), where a stablecoin issuer provides a third-party custodian to a client it must undertake an appropriate risk assessment of that custodian. Stablecoin issuers must also retain ultimate responsibility for safe custody of approved stablecoins held on behalf of clients and ensure that they continue to meet all their regulatory obligations with respect to custody service and outsourced activities.
Added: July 2025SIO-10.2.4
In undertaking an appropriate risk assessment of the third-party custodian in accordance with Paragraph SIO-10.2.3, stablecoin issuers should take into account any or all of the following:
(a) The expertise and market reputation of the third-party custodian, and once an approved stablecoin has been lodged by the licensee with the third-party custodian, the crypto-asset custodian’s performance of its services to the licensee;(b) The arrangements, including cyber security measures, for holding and safeguarding approved stablecoins;(c) An appropriate legal opinion as to the protection of approved stablecoins in the event of insolvency of the custodian;(d) Whether the third-party custodian is regulated and by whom;(e) The capital or financial resources of the third-party custodian;(f) The credit rating of the third-party custodian; and(g) Any other activities undertaken by the third-party custodian and, if relevant, any affiliated company.Added: July 2025SIO-10.2.5
When assessing the suitability of the third-party custodian, the stablecoin issuers must ensure that the third-party custodian will ensure full protections to client assets (approved stablecoins) and that the client assets (approved stablecoins) are fully segregated, both legally and operationally, from the own assets of the third-party custodian.
Added: July 2025SIO-10.2.6
A stablecoin issuer that safeguards, stores, holds or maintains custody of approved stablecoins with a third-party custodian, must establish and maintain a system for assessing the appropriateness of its selection of the custodian and assess the continued appointment of that custodian periodically as often as is reasonable. The licensee must make and retain a record of the grounds on which it satisfies itself as to the appropriateness of its selection or, following a periodic assessment, continued appropriateness of the approved stablecoin custodian.
Added: July 2025
