Kelley Howes spoke to Board IQ about President Biden's executive order on the development of digital assets, which underscored a fact more fund groups are coming to accept: that interest in cryptocurrencies and other digital holdings is wide and access is likely to keep growing.
Even though the holdings are uncommon for retail products, it doesn't mean companies can completely ignore them. In fact, even if a mutual fund or ETF isn't exposed to digital assets, the fund board and advisor must still consider them in other parts of the business. According to Kelley, a fund advisor's code of ethics, for example, may need to factor in digital currency if it considers them securities.
"It's part of the bigger question – are these securities? I think what certain people on the staff of the commission have said is, 'We're not sure that all of them are securities, but we're pretty sure some of them are," Kelley said. "So you can't ignore a category of securities just because they're digitized or tokenized. They still have to be considered under the relevant rules, and that includes the code of ethics."
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Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
© Morrison & Foerster LLP. All rights reserved
