Fidelity Pushes for SEC Rules on Tokenized Asset Trading

Crypto News

Fidelity Investments submitted a formal letter to the U.S. Securities and Exchange Commission on Friday calling for a broader regulatory framework covering how broker-dealers offer, custody, and trade crypto assets. The letterwas addressed to the SEC’s Crypto Task Force in response to its open call for public input earlier this month.
Fidelity, the third-largest asset manager in the United States, describedit as “critical” for the SEC to establish clear rules for trading tokenized securities on alternative trading systems. The company said that the framework must also cover tokenized instruments issued by third-party providers, not only those that a broker-dealer issues itself.
The letter outlinedthat tokenized real-world assets span a wide range of asset classes. Those include equities, real estate, bonds, and private credit, each with different issuance structures, legal characteristics, and valuation models. In some structures, a token represents the holder’s indirect interest in the underlying security through a securities entitlement. In others, it may function as a securities-based swap, which can only be offered to eligible contract participants.

Roberto Braceras, Fidelity’s general counsel, also urged the SEC to address the divide between centralized and decentralized trading venues. The letter asked the agency to consider how intermediated and disintermediated platforms can operate alongside each other under the same regulatory system.

Fidelity flagged a specific problem with existing reporting requirements. Decentralized finance platforms and other disintermediated systems have no central authority capable of producing the financial disclosures that current SEC rules require. The company recommended that the agency issue guidance allowing broker-dealers to use distributed ledger technology for alternative trading system recordkeeping. Fidelity said removing that documentation burden would eliminate what it called “undue burden” on decentralized systems.

SEC Chairman Paul Atkins has expressed support for 24/7 capital markets and has allowed financial companies to experiment with tokenized trading. The agency’s current posture reflects a broader openness to integrating blockchain infrastructure into traditional finance.

A separate joint policy statement published in March by the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency addressed the capital treatment of tokenized securities. The three agencies stated that the technology used to issue or transfer a security does not change its capital requirements. Tokenized equities, debt instruments, real estate investment trusts, and other securitized assets remain subject to the same banking capital rules as the underlying assets they represent.

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Source: coinmarketcap.com