Custodian vs Administrator vs Bank for an SPV

An SPV custodian vs administrator vs bank is three vendors, not one stack. The administrator keeps the books, cap table, and K-1s. The bank holds cash in a dedicated vehicle account. A custodian holds securities when an Advisers Act qualified-custodian rule actually applies. Most deal SPVs confuse the cash account with custody of stock.

This is general information, not legal, tax, or investment advice, and not an offer of securities. Whether a given manager is a registered adviser, and whether a given holding is a “security” that must sit with a qualified custodian, is a facts-and-counsel call.

SPV custodian vs administrator: the three-vendor split

GPs collapse the labels because the same invoice sometimes covers formation, the account, and the cap table. The legal jobs do not collapse.

Administrator. Runs the vehicle’s records. Formation workflow, operating agreement and subscription package, investor onboarding, cap table, capital-account tracking, K-1 support, and investor reporting. What SPV administration includes is the product-level map of that work. The administrator does not become the issuer, does not hold title to the portfolio shares unless a separate custody arrangement says so, and does not replace the bank.

Bank. Holds cash. Subscriptions wire in. The SPV pays the company or the seller. Distributions wire out. On Allocations banking, a dedicated account per vehicle is part of onboarding with entity formation, not a separate SKU. A bank account is not, by itself, a securities custody account.

Custodian. Holds client funds or securities in the Advisers Act sense when that rule applies. 17 CFR § 275.206(4)-2 (the custody rule; text fetched 2 Sep 2026) defines a qualified custodian as (i) a bank or FDIC-insured savings association, (ii) a registered broker-dealer holding assets in customer accounts, (iii) a registered futures commission merchant for specified commodity-related assets, or (iv) a foreign financial institution that customarily holds financial assets and keeps client assets segregated from proprietary assets.

The bank that takes the subscription wire can be a qualified custodian for cash. It is still the wrong mental model for privately offered startup stock recorded on the company’s cap table.

What the administrator is for

Deal SPVs live and die on records. Who is admitted, at what amount, with which side letter, after which KYC file. Who is on the K-1. Who gets the distribution.

A domestic multi-member LLC that accepts default partnership classification files Form 1065 and furnishes Schedule K-1 to each partner. The 2025 Instructions for Form 1065 (fetched 2 Sep 2026) state that Form 1065 is an information return: the partnership generally does not pay the income tax, and partners include the items on their own returns. Those instructions also state that failure to furnish a required Schedule K-1 when due, or to include required information, may draw a $340 penalty per K-1 (higher if the failure is intentional). That is why “admin” is not a nice-to-have PDF shop. It is the shop that keeps the cap table reconcilable to the tax pack.

Administration is also where closes actually happen: subscription countersignature, wire matching, and the post-close file. Allocations SPVs are built around that sequence. Published fees (fetched 2 Sep 2026): Standard SPV $9,950 one-time (up to 35 investors, one close, VC, five-year term, +$100 per extra investor); Premium SPV $19,500 one-time (up to 50 investors, extra closes $2,000); Fund $19,500/year. Platform carry is 0%. Additional fees may apply. Banking is included in onboarding as a dedicated account per vehicle.

Do not treat the administrator as the qualified custodian just because it can see balances. Seeing a bank feed is not “maintaining” funds or securities under the custody rule.

What the bank is for

Cash has to sit somewhere the vehicle can control. That is the bank.

Open the account in the SPV’s legal name, after the Delaware certificate of formation exists and after the EIN is issued. Banks will not KYC a nameless LLC. They will also not treat the GP’s operating account as a substitute. Commingling subscription cash with the management company is how you create both an accounting mess and a custody-analysis mess.

Wires to the GP, missing vehicle statements, and exit proceeds in a personal account are the usual failures. Allocations banking puts the dedicated account on the same path as formation. That is cash ops, not a claim that startup stock is in “custody” at that bank.

If the SPV holds listed securities or settles a secondary through a broker-dealer, that customer account can be a qualified custodian under § 275.206(4)-2(d)(6)(ii). A cash-only SPV bank account is still not that.

What a custodian is for, and when the rule actually bites

The custody rule applies to an investment adviser that is registered or required to be registered under Advisers Act § 203. If you are in that bucket and you have “custody” of client funds or securities, a qualified custodian must maintain those funds and securities in a separate client-named account or in an omnibus client account in the adviser’s name as agent or trustee (17 CFR § 275.206(4)-2(a)(1)).

“Custody” includes holding funds or securities, authority to withdraw them, and acting as GP or managing member of a pooled vehicle (§ 275.206(4)-2(d)(2)). A GP often has custody because of that role, even if the stock sits on the company’s cap table.

Default duties, if the rule applies: notify clients of the custodian, have a reasonable basis to believe the custodian sends at least quarterly statements to each member, and get an annual surprise exam — unless a pooled-vehicle audit exception fits (GAAP financials to beneficial owners within 120 days of year-end, PCAOB-registered accountant) (§ 275.206(4)-2(a)(2)–(a)(5), (b)(4)).

Most VC SPVs reach for the privately offered securities exception from the qualified-custodian requirement: uncertificated securities acquired in a non-public offering, recorded in the client’s name on the issuer’s (or transfer agent’s) books, transferable only with issuer or holder consent. For a pooled vehicle that exception also requires the (b)(4) audit (§ 275.206(4)-2(b)(2)). It is not a free pass because the company emailed an SPA.

Unregistered managers are not automatically inside the rule, and not automatically free of every LP or broker-dealer custody demand. Do not self-serve the registration analysis.

How the three sit on a live close

Form the LLC, get the EIN, open the vehicle cash account, collect subscriptions, match wires, fund the SPA, then run books and K-1s. The company recording the SPV as holder is not the administrator taking custody. If you are a registered adviser with custody that does not fit an exception, a qualified custodian and the audit or surprise-exam path run in parallel.

Secondary SPVs that settle through a broker-dealer add a customer account at that firm. Allocations Securities, LLC dba AllocationsX (FINRA/SIPC, CRD 317750) is the broker-dealer for Allocations’ secondary market — a separate capacity from administration. Nothing here is an offer of any security.

Compare platforms on process and published price, not on who uses the word “custody” in marketing. Top SPV platform 2026 and AngelList vs Allocations are the live comparison pages.

Does an SPV always need a qualified custodian?

No. The Advisers Act custody rule applies to advisers registered or required to be registered under § 203 who have custody of client funds or securities. Even then, privately offered, uncertificated securities recorded in the client’s name can fit an exception from the qualified-custodian requirement if the pooled vehicle is audited as the rule describes. Unregistered managers are a different analysis. Counsel, not a vendor label, decides.

Is the SPV bank account the same as a custodian?

No. A bank holds cash. A qualified custodian, when the rule applies, maintains funds and securities under § 275.206(4)-2. The same legal entity can be both a depository bank and a qualified custodian, but a dedicated cash account used to take subscriptions is not automatically custody of the startup stock.

What does the administrator do that the bank does not?

Books, cap table, admission of members, subscription files, and the partnership tax pack (Form 1065 / Schedule K-1 for a multi-member LLC taxed as a partnership). The bank does not issue K-1s. The administrator does not hold title to the shares unless a separate custody arrangement says so.

Who opens the SPV bank account?

The vehicle, after it exists and has an EIN. On Allocations, a dedicated account per SPV or fund is part of onboarding with formation. Do not collect LP wires into the GP operating account.

Does Allocations charge extra for banking or take platform carry?

Published Standard SPV is $9,950 one-time; Premium SPV $19,500 one-time; Fund $19,500/year; extra investors +$100; extra Premium closes $2,000. Platform carry is 0%. Banking is included in the onboarding claim on /banking, not a separate published SKU. Additional fees may apply; see /fees.