The regulators have underscored their full support for key spot crypto asset products.
Grygo is the chief content officer for FTF & FTF News.
Spot crypto assets are getting the full attention and cooperation of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), according to a new Joint Statement “regarding the trading of certain spot crypto asset products.”
The joint SEC-CFTC declaration “clarifies staff’s views that SEC- and CFTC-registered exchanges are not prohibited from facilitating the trading of certain spot commodity products. The joint effort exemplifies how staff of the two agencies can coordinate to promote trading venue choice and optionality for market participants,” according to the announcement.
The regulators are taking action as the SEC’s Division of Trading and Markets and the CFTC’s Division of Market Oversight and Division of Clearing and Risk “are announcing a cross-agency initiative in furtherance of the SEC’s Project Crypto and the CFTC’s Crypto Sprint to coordinate efforts regarding the process for enabling the trading of certain spot crypto asset products” as outlined in the statement.
This move follows the President’s Working Group (PWG) on Digital Asset Markets effort, which wants the SEC and CFTC to “coordinate to make America the best place in the world to innovate with blockchain technology and participate in crypto asset markets.
“Specifically, the PWG Report recommends that the agencies should use their existing authorities to promote ‘regulatory clarity that best keeps blockchain-based innovation within the United States,’ ” according to the report. “As part of this effort, the Divisions are coordinating to issue guidance regarding the listing of leveraged, margined, or financed spot retail commodity transactions on digital assets to implement the PWG Report recommendations.”
The divisions of the regulators “will promptly review filings and requests” from designated contract markets (DCMs), CFTC-registered foreign boards of trade (FBOT), and SEC-registered national securities exchanges (NSEs) “seeking to facilitate trading of certain spot crypto asset products,” officials say. “As market participants prepare to submit any necessary registrations, proposals, or requests for appropriate relief to the SEC and/or CFTC, the Divisions stand ready to engage regarding any questions.”
A top concern of market participants is likely to be margin, clearing, and settlement. “In the Divisions’ view, applicable rules permit clearinghouses to partner with a custodian to maintain customer accounts,” according to the statement. The Divisions “stand ready” to address questions from SEC-registered clearing agencies and CFTC-registered derivatives clearing organizations (DCOs) that want to take part in spot crypt asset transactions. The statement also covers the monitoring of underlying markets, the public dissemination of trade data, the promotion of fair and orderly markets, and innovation with investor and customer protections.
“Market participants should have the freedom to choose where they trade spot crypto assets. The SEC is committed to working with the CFTC to ensure that our regulatory frameworks support innovation and competition in these rapidly evolving markets,” says SEC Chairman Paul Atkins in a prepared statement.
The full statement can be found here: https://shorturl.at/FSZSx
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