SEC Seeks Public Input on Crypto Asset Trading Regulations

According to BlockBeats, U.S. SEC Commissioner Hester Peirce released a statement on December 17, inviting public feedback on issues related to the trading of crypto assets on national securities exchanges (NSE) and alternative trading systems (ATS). This follows the release of a new set of FAQs by the Division of Trading and Markets. The statement emphasizes the need for clear trading and clearing arrangements for crypto asset securities and the trading pairs of securities and non-securities crypto assets. Peirce highlighted the SEC's readiness to collaborate with market participants to facilitate compliant trading on regulated platforms. Peirce noted the urgent need for clearer market structure rules to protect investors and maintain market order while avoiding unnecessary regulatory burdens on innovation. She expressed particular interest in whether Regulation ATS, introduced in 1998, and Regulation NMS are outdated in the context of crypto assets and blockchain technology. Key topics for public input include reducing entry barriers for crypto asset securities and trading platforms, encouraging innovation, assessing whether current Reg NMS and Reg ATS impose disproportionate compliance costs on crypto trading, and whether a specific Form ATS should be established for crypto ATS or if existing disclosure requirements should be adjusted. Other considerations include whether crypto ATS information disclosures should remain non-public or be subject to SEC review or public mechanisms, the necessity of retaining Form ATS-R quarterly reporting in the context of blockchain and on-chain data traceability, and the need for clear compliance methods for converting non-dollar assets to dollars. Additionally, the statement seeks input on handling trade information confidentiality, system risk controls (Rule 15c3-5), and system compliance (Reg SCI), as well as how to avoid regulatory obstacles to individual software development and the use of automated or decentralized trading methods. Peirce emphasized that these issues will be crucial for the SEC's crypto working group in future policy development. The regulatory body is open to broader suggestions to improve the regulatory framework for NSE and ATS. The statement is seen as another indication of the SEC's relatively open stance towards reforming the market structure for crypto asset trading.