Last week, the SEC staff published new detailed guidance on its views of when a digital asset may be considered a security, in the form of two documents: a guidance “framework” issued by the SEC’s Strategic Hub for Innovation and Financial Technology and a no-action letter from the SEC’s Division
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Zachary J. Zweihorn
Mr. Zweihorn is counsel in Davis Polk’s Financial Institutions Group and the trading and markets practice. [Full Bio]
Chairman Jay Clayton and Director Brett Redfearn Preview Potential Further Equity Market Structure Reforms—Exchange Market Data Business Model Targeted
Posted in Broker-Dealer, SEC
Earlier this month, SEC Chairman Jay Clayton and Division of Trading and Markets Director Brett Redfearn engaged in a public dialogue on equity market structure issues. In addition to reviewing three equity market structure initiatives adopted by the SEC in 2018 (the transaction fee pilot, enhanced order handling …
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SEC Adopts Enhanced Order Handling Disclosure Requirements
The SEC recently voted to adopt amendments to Rule 606 of Regulation NMS (the “Final Rule”) that expand broker-dealers’ disclosure obligations with regard to how they handle investors’ orders. Specifically, the Final Rule requires broker-dealers, beginning May 20, 2019, (i) to provide, upon request, individualized reports in a…
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Regulators Step Up Enforcement on Crypto Firms
After a several month lull that led some to question the SEC’s focus on crypto enforcement, this week saw a spate of enforcement activity involving crypto assets: several SEC enforcement actions, an SEC trading suspension order, the first FINRA cryptocurrency enforcement action, and a preliminary court decision consistent with the…
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The CAT Nap Continues
Posted in Broker-Dealer, SEC
The Director of the SEC’s Division of Trading and Markets, Brett Redfearn, recently provided an update on the status of the consolidated audit trail (the “CAT”), which is being developed by the SROs and Thesys Technologies, LLC, the CAT plan processor. The public statement noted that although the…
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SEC Proposes Equity Market Study: Beginning of the End for the Maker-Taker Model?
In the first major trading and markets initiative under SEC Chairman Jay Clayton, on March 14, 2018, the SEC proposed to establish a transaction fee pilot program to study the effects of maker-taker fee structures. A pilot study was initially recommended by the SEC’s Equity Market Structure Advisory Committee in…
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SEC, FinCEN, and CFTC Actions Continue to Paint a Fragmented Regulatory Landscape for Digital Tokens
By Jai R. Massari, Annette L. Nazareth, Zachary J. Zweihorn, Jeanine P. McGuinness & Zachary B. Shapiro on
Posted in Anti-Money Laundering, Fintech
The past few days have seen several interesting developments in the law and regulation of digital tokens. Each action reflects an intense focus by U.S. regulators to clarify the treatment of digital tokens, from those issued by startups in initial coin offerings (ICOs) to the more “traditional” cryptocurrencies…
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FINRA Seeks Comment on Applying Various Rules to U.S. Treasuries and Extending Certain Equity Market Rules to All Debt Securities
Posted in Broker-Dealer, SEC
Responding to a 2016 request by the SEC (in consultation with the Treasury Department), FINRA recently reviewed the extent to which various FINRA rules apply to U.S. Treasury securities. Following up on that analysis, on February 6, 2018, FINRA issued Regulatory Notice 18-05, requesting comment on whether it should…
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The CAT is Peeking Out of the Bag
Posted in SEC
In a move that took some by surprise, SEC Chairman Jay Clayton on Tuesday rejected requests from the SROs to delay the implementation of the Consolidated Audit Trail (“CAT”), despite the SROs’ cybersecurity concerns and indications that the CAT is not yet operationally ready. Thus, the first phase of CAT…
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Treasury Chimes in on Equity Market Structure
The Treasury Department’s recent report on capital markets regulation includes a robust discussion of equity market structure issues. The report does not break new ground or raise issues that have not been debated previously at length, including by the SEC’s Equity Market Structure Advisory Committee (“EMSAC”). That said, the report