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- Fidelity urges the SEC to clarify crypto trading and custody rules for brokers.
- The firm says tokenized securities still create legal and classification issues.
- On-chain settlement could cut costs, but oversight gaps still pose compliance risks.
Fidelity Investments has urged the US Securities and Exchange Commission to clarify how broker-dealers should handle digital assets. The request adds to a wider debate over crypto oversight as major firms push for rules that support compliant market activity.
Fidelity sent its recommendations to the SEC Crypto Task Force on March 20, 2026. The agency had asked for views on how national exchanges and alternative trading platforms manage digital asset activity. Fidelity said broker-dealers need clear rules for trading and custody.
The firm backed the task force’s outreach to market participants. It said the SEC’s efforts could support responsible innovation while also protecting investors and market integrity. Fidelity made clear that better rules are needed for firms working within regulated financial structures.
Fidelity Flags Tokenized Asset Risks and Settlement Gaps
One of the major issues in the filing was the handling of tokenized securities. Fidelity said that brokers and intermediaries may not always have a complete view of how the digital asset is designed. This can make it difficult to determine if the digital asset has the same status as the original security.
The company said that clear guidance would help the platforms process trades with fewer legal uncertainties. It would help eliminate confusion when classifying digital assets under existing securities laws. According to Fidelity, the move is necessary for smoother market operations.
Fidelity also addressed the use of blockchain-based systems in traditional brokerage activity. It said these systems could improve settlement speed and lower operational costs. At the same time, it warned that gaps in oversight still create risks for broker-dealers.
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SEC Guidance Continues to Evolve
The filing said that unclear definitions on record-keeping and settlement processes have remained a significant barrier. Fidelity mentioned that firms should get confirmation first to facilitate on-chain settlement activity under existing rules. Without such clarity, broker-dealers may face increased compliance pressure.
The submission comes as the SEC continues to develop its digital asset guidance. The most recent guidance grouped crypto assets into categories like digital commodities, collectibles, tools, stablecoins, and digital securities. This classification is supposed to show which crypto assets are governed by securities law.
The broader policy debate has also changed in recent months. For instance, the SEC chairman, Paul Atkins, has criticized the agency’s former approach of relying on enforcement.
He said it forced innovation elsewhere in the world when companies couldn’t identify rules designed for their business. Against that backdrop, the Fidelity recommendations provide a framework for the safe growth of the market in the United States.
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