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In a significant move for the financial industry, the Securities Industry and Financial Markets Association (SIFMA), representing a vast majority of the U.S. financial market, recently met with the SEC's Crypto Task Force. The discussion centered on establishing clear, progressive regulations for digital assets, emphasizing consistency while adapting to technological advancements.
SIFMA's Call for Clear Crypto Regulations
SIFMA, a powerful voice for broker-dealers, investment banks, and asset managers, engaged with the U.S. Securities and Exchange Commission's (SEC) Crypto Task Force to advocate for a structured approach to digital asset regulation. The meeting, held on Thursday, focused on critical areas including digital asset issuance, digital commodities, and tokenized securities.
Key Takeaways from the Meeting
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Consistent and Updated Rules: SIFMA urged the SEC to apply existing rules consistently to digital asset service providers, while simultaneously updating them to reflect technological progress.
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Expanded Disclosure Regulations: The industry group proposed adapting current disclosure regulations to encompass new types of securities, particularly those involving digital assets.
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Separation of Functions: For digital commodities and tokenized securities, SIFMA stressed the importance of separating functions like exchange and broker-dealer, or trading and custody, to foster competition and interoperability.
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Limited Retail Participation: SIFMA suggested limiting direct retail participation in the trading of digital securities and commodities.
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Transparent Framework Development: The association called for an open and transparent process in developing a new framework for digital securities issuance and trading, with a clear definition of securities and digital commodities.
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Holistic Legislative Approach: SIFMA recommended a comprehensive legislative approach that incorporates technological updates into statutory texts and includes provisions for cross-border applicability.
Addressing Transitional and Hybrid Arrangements
SIFMA highlighted the growing interest from traditional finance players in integrating digital assets into their offerings. They emphasized that new rulemaking should account for "transitional and hybrid arrangements," signaling a need for regulatory flexibility as the market evolves.
Prior Concerns Regarding Exemptive Relief
Earlier in the week, SIFMA had already expressed concerns to the SEC regarding digital asset companies seeking to offer tokenized equities through specific exemptive relief. The group urged the SEC to reject such requests, advocating instead for a robust public process that allows for meaningful feedback before decisions are made on new trading and issuance models. This stance underscores SIFMA's commitment to transparency and a level playing field in the burgeoning digital asset space.
Sources
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Major TradFi industry group calls on SEC to establish open, progressive crypto rules, The Block.
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