Welcome to the Regulatory Roundup. Each month, Eversheds Sutherland Investment Services attorneys review significant regulatory developments (including notable rulemakings and guidance from securities regulators) from the previous month that are of interest to retail broker-dealer and investment adviser firms.
SEC Crypto Task Force Hosts a Roundtable on Decentralized Finance
- On June 9, the SEC’s Crypto Task Force hosted a roundtable on decentralized finance – the last in its series of five scheduled roundtables. The roundtable featured comments from SEC Chairman Paul Atkins, who noted the potential advantages of “self-executing software code” that could displace intermediaries such as broker-dealers, advisers, exchanges, and clearing agencies. He also noted that he was excited about the use of on-chain software systems by issuers and intermediaries to eliminate economic friction, increase capital efficiency, enable new types of financial products, and enhance liquidity.
- The roundtable can be watched in its entirety here.
SEC Withdraws Fourteen Rulemaking Proposals
- On June 12, the SEC formally withdrew 14 notices of proposed rulemaking issued between March 2022 and November 2023. The SEC noted that it “does not intend to issue final rules with respect to these proposals” but will “issue a new proposed rule” if the SEC decides to pursue future regulatory action in any of the withdrawn areas.
- Withdrawn proposals related to dual-registrants include the following: (1) Conflicts of Interest Associated with the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers; (2) Safeguarding Advisory Client Assets; (3) Regulation Best Execution; (4) Outsourcing by Investment Advisers; (5) Cybersecurity Risk Management Rule for Broker-Dealers, Exchanges, and Other Market Infrastructure Entities; (6) Cybersecurity Risk Management for Investment Advisers, Registered Investment Companies, and Business Development Companies; and (7) Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social and Governance Investment Practices.
SEC Extends Compliance Date for Amendments to Reserve Computation Requirement
- On June 25, the SEC extended the compliance date to June 30, 2026 (from December 31, 2025), for amendments to Rule 15c3-3 under the Securities Exchange Act of 1934, as amended (Exchange Act) (the broker-dealer customer protection rule) that would require certain broker-dealers to increase the frequency of the required reserve computations under Rule 15c3-3 from weekly to daily.
- In extending the compliance date, SEC Chair Paul Atkins noted that, “[t]he days of unreasonable deadlines have passed” and that the additional time would “allow broker-dealers to avoid operational challenges with meeting the initial compliance date.”
SEC Office of the Investor Advocate Delivers Report to Congress on Objectives for Fiscal Year 2026
- On June 25, the SEC’s Office of the Investor Advocate (the Investor Advocate) detailed its priorities for fiscal year 2026. The Investor Advocate intends to focus on the following policy objectives: (1) enhancing the accessibility of disclosures for investors; (2) disclosure and investor testing; (3) China-based variable interest entities; (4) private market investments in retirement accounts; (5) evaluating the potential impact of self-regulatory organization rule proposals on investors; and (6) Crypto Task Force requests for information.
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