Oct. 16, 2026
To the Secretary:
Sereel Technologies, Inc. ("Sereel") supports the Commission's effort to give advisers workable custody options for crypto assets and tokenized securities. Sereel builds infrastructure for issuer-sponsored tokenized securities. We are preparing to register as a transfer agent in the United States, and we are seeking authorization from the Capital Market Authority of Rwanda to operate a blockchain-based central securities depository. Sereel is a CMTA Recognized Expert and Technology Service Provider for tokenized securities standards.
Our comments address how US advisers can safeguard tokenized securities issued outside the conventional US depository system.
1. Confirm that a licensed foreign central securities depository can be a qualified custodian. The custody rule includes foreign financial institutions that customarily hold financial assets for their customers and keep advisory client assets segregated from their own. We ask the Commission to confirm that a central securities depository licensed and supervised by a foreign securities regulator meets this standard when it holds tokenized securities for clients. We suggest the following conditions: the depository is licensed and supervised as market infrastructure by its home securities regulator; client positions are held in segregated accounts, protected from the depository's creditors under local law; the depository's financial statements are audited annually by an independent public accountant; the depository consents to the enforcement of US judgments; and the keys controlling client positions are held in hardware security modules or comparable controls.
We also ask that a newly licensed depository be able to satisfy the "customarily holds" requirement from the date of its authorization. A requirement for years of prior operating history would exclude the new market infrastructure that tokenization makes possible, even where the home regulator has approved it.
2. Confirm that the privately offered securities exception applies to issuer-sponsored tokenized securities. The current rule excepts privately offered securities that are acquired directly from the issuer, are uncertificated, are recorded only on the books of the issuer or its transfer agent, and are transferable only with the issuer's consent. Issuer-sponsored tokenized securities can meet each condition. The token is an entry in the master securityholder file, not a certificate. The token contract allows transfers only to holders the issuer or its transfer agent has approved. We ask the Commission to confirm that such securities qualify for the exception when the master securityholder file is maintained by a registered transfer agent, including on a blockchain as permitted by the Commission's transfer agent proposal (File No. S7-2026-30). Coordinating the two rulemakings would give advisers one consistent answer.
3. Let state trust companies custody tokenized securities as well as crypto assets. The proposed state trust company pathway is limited to crypto assets and related cash. Many advisers will hold both crypto assets and tokenized securities for the same client. Limiting state trust companies to crypto assets would force advisers to split one client's tokenized holdings across custodians, or to keep tokenized securities with custodians that may lack the technology to hold them. We ask the Commission to extend the pathway to tokenized securities, or to clarify how a state trust company that qualifies as a bank under the Advisers Act may hold them.
We would welcome the opportunity to provide technical detail or meet with the Division of Investment Management.
Respectfully submitted,
Lance Davis
CEO | Sereel Technologies Inc.
10735 S Western Ave, Ste 6 #183 Chicago, IL 60643