The SEC shows some mercy to broker-dealers handling security tokens

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The US Securities and Exchange Commission is listening.

At least per. December 23rd executive order, The SEC responds to long-standing complaints from the industry that no one knows who can handle trading the security token.

The SEC is both asking for a comment on the issue and extending a hand to the crypto industry. Perhaps most notably, the Commission Communication will protect broker-dealers from enforcement over the next five years:

“In particular, the Commission’s position, which expires after a period of five years from the date of publication of this declaration, is that a broker – dealer operating in the circumstances set out in Title IV will not be the subject of a Commission enforcement action.”

The “specified circumstances” basically boil down to keeping the security token the primary focus of the operation and performing due diligence on cybersecurity and disclosure to clients, including ensuring that any potential client is aware that the broker in question handles digitally active securities. .

In addition to the announcement, the SEC asks for comments on a number of issues related to proper requirements for trading the security token. One of the questions suggests that the Commission seeks to allow investors to use non-collateral tokens such as Bitcoin and Ether to pay for the collateral token: “Should this heading be extended to include the use of non-collateral digital assets as a means of payment for securities with digital assets? “

A few weeks ago there were a number congressmen signed a letter to the SEC and ask the Commission for clarification on this very issue. These congressmen repeated the chorus that has been from the crypto industry for a long time: regulatory clarity.

The SEC’s reluctance to make major statements is understandable in some way. A regulator will hardly move as fast as a technical developer. Therefore, many of the SEC’s most striking features have had rather limited use, including one series of non-action letters for token projects.

Despite long-term hopes that security tokens can upgrade the traditional stock markets, the industry has been plagued by silent trading and low volumes.



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