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- Fidelity urges clear crypto regulations to support growth and investor protection.
- The firm calls for guidance on tokenized securities trading.
- It highlights the need to balance innovation with strong oversight.
Fidelity Investments has responded to a request for information from the US Securities and Exchange Commission (SEC). The request came from Commissioner Hester Peirce and focuses on crypto asset trading. Fidelity supports the SEC’s Crypto Task Force and its effort to modernize regulations.
The firm thinks that crypto assets have the power to strengthen financial markets. They say that if crypto assets are integrated properly, it will enhance transparency while at the same time increasing access. Fidelity appreciates the Task Force’s efforts to work closely with industry players. They see this as an essential step towards regulation. Fidelity cites the strength of the US market structure.
The system already allows for the trading of assets on various exchanges. This helps to create an efficient system. Fidelity says that crypto regulations should be built on this rather than replacing it. The firm also highlights the significance of principles. They say that investor protection, fairness, and transparency are essential. They should be at the center of all crypto-related regulations.
Fidelity Urges SEC to Expand Broker Rules
Fidelity asks the SEC to broaden its guidelines for broker-dealers. The company wants more clarity on how it can provide, hold, and trade crypto assets. The company says that the SEC’s latest guidance has helped, but more clarity is needed.
Fidelity has a strong focus on tokenized securities. This type of security includes traditional securities that are held on a blockchain network. The company asks the SEC to create clear guidelines that will allow the trading of these securities on alternative trading systems.
It says that tokenized securities have different structures and rights. This confuses trading platforms. The platforms might not understand the correct classification of these securities. This might hinder the growth of the market.
Fidelity says that unclear guidelines create more legal risks. The platforms need clarity to trade efficiently. The company says that tokenized securities should have the same status as their underlying securities. This might improve efficiency in the market, eliminating fragmentation.
Fidelity Supports Growth of Trading Systems
Fidelity emphasizes the emergence of conventional as well as blockchain-based trading systems. The former involves intermediaries, whereas the latter is based on blockchain technology. The firm expects a rise in both systems.
Fidelity also mentions the advantages of decentralized systems. These include high speed, lower costs, and transparency. However, there is a lack of investor protection in decentralized systems. The firm has asked the SEC to address these issues properly. Fidelity has asked the SEC to provide proper disclosures for investors.
The firm has also asked the SEC to provide a balanced approach. This will help in the growth of new systems without compromising existing rules. The firm has asked the SEC to amend existing rules. The current rules on record-keeping do not support blockchain technology.
Fidelity has asked the SEC to permit distributed ledger systems. These can be used in compliance. The firm has also asked the SEC to provide clarity on transaction settlement. Broker-dealers can use on-chain transactions. Proper rules can help avoid confusion. Fidelity believes that proper guidance will help in the growth of the market.
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