SEC, CFTC Roles and Operational Gaps

CLARITY Act Sets Agency Roles, Leaves Back-Office Work Open

MarketRegulation
Author
Ahmed Barakat
Author
Part of the Team Since
Mar 2024
About Author

Ahmed Barakat is a journalist and copywriter based in Georgia with a growing focus on blockchain technology, DeFi, AI, privacy, digital assets, and fintech innovation.

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The CLARITY Act would establish a regulatory framework for digital assets and allocate responsibilities between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Its provisions address registration, oversight, recordkeeping, and custody in specified areas, but they do not prescribe how firms should reconcile activity or modernize legacy operational processes.

Jurisdictional clarity and operational readiness are different problems. H.R. 3633, introduced by Chairman French Hill on May 29, 2025, would establish a comprehensive market-structure framework for digital assets.

Under Section 401, the CFTC would receive exclusive regulatory jurisdiction over digital commodity cash or spot transactions that occur on or with digital commodity exchanges, brokers, and dealers required to register with the agency. The bill also provides for an expedited CFTC registration process for those entities.

The SEC would retain anti-fraud and anti-manipulation authority over transactions involving permitted payment stablecoins and digital commodities that occur on or with an SEC-registered entity.

Section 304 would require SEC registrants that are also registered with the CFTC as digital commodity exchanges, brokers, or dealers to adopt conflict-of-interest policies. It would also require the SEC and CFTC to enter into a memorandum of understanding intended to support non-duplicative oversight and appropriate information sharing.

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The Operational Gap CLARITY Act Doesn’t Touch

The bill’s regulatory framework does not itself resolve the operational pressures identified in capital markets’ back offices. An AutoRek report on capital markets operations, based on a survey of 250 senior operations, finance, and technology leaders in the United States and the United Kingdom, describes strain from rising volumes, new asset classes, data fragmentation, and shallow AI integration.

Among the report’s findings, 85% of respondents expected scalability strain as activity grows against legacy processes. Of firms working with digital assets, 59% reported disproportionate operational complexity relative to other asset classes.

The report also found that 41% of respondents identified data integration and compatibility as their top operational challenge, while firms reported losing 15.9% of operational budgets to rework driven by manual processes and spreadsheets.

The survey found that 98% of firms use AI somewhere in operations, but only 14% have fully integrated it across operations. Those findings concern operating models rather than the allocation of agency jurisdiction.

A market-structure statute can define regulatory categories and obligations without, on its own, integrating data, replacing manual workflows, or reconciling records across a firm’s systems.

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Where the Bill Does Touch Infrastructure

The bill does contain provisions relevant to operational infrastructure. Section 305 would allow brokers, dealers, transfer agents, investment advisers, investment companies, and national securities exchanges to use records from a blockchain system for existing recordkeeping requirements, subject to an SEC rulemaking required within 180 days of enactment.

Section 402 would require futures commission merchants to hold customer digital assets with qualified digital asset custodians. The congressional summary also describes requirements concerning recordkeeping and the commingling of customer assets.

These provisions address specified custody and recordkeeping matters, rather than a general framework for resolving data-integration or manual-process challenges identified by the AutoRek survey.

If enacted, the CLARITY Act would create a statutory framework for digital commodities, registration, and defined areas of SEC and CFTC authority. It would also establish requirements and rulemakings related to recordkeeping, custody, disclosures, and market intermediaries.

It would not, by itself, provide a detailed operating model for the data-integration, rework, and scalability issues reported by capital-markets operations leaders. Regulatory clarity and operational modernization can advance together, but they remain separate tasks under the evidence available here.

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Source: cryptonews.com