The US Securities and Exchange Commission (SEC) reconsider a proposed rule that imposes stricter guardianship requirements on investment advisers who keep crypto and other assets.
Acting SEC chairman Mark Uyeda stated during the “Investment Management Conference” in San Diego that the Agency Evaluates or the rule that is introduced should change or withdraw under the earlier administration.
Judge of the administration
Initially supported by former SEC chairman Gary Gsler, the proposed rule tried to improve the protection of investors by ensuring that investment advisers are correctly protecting client assets.
One of the proposals was to limit qualified preservators to federally chartered entities. At the time, Gensler emphasized the need to prevent abuse or loss of assets.
Uyeda, however, emphasized public comments that criticize the wide scope of the rule, so that the agency reconsider its approach.
Former chairman of the House Financial Services Committee Patrick Mchenry sent one commentary On May 2023 stating that the rule was ‘very worrying’ for crypto companies.
The reasoning was that supervisors discouraged federally chartered banks from custody of assets of crypto-related companies. Mchenry said that the proposed limitation of the rule would leave the players of the crypto industry without the correct detention solutions.
Shift in regulatory priorities
Uyeda said that the SEC is now aimed at developing regulatory measures that are in line with the legal authority while maintaining cost efficiency and effectiveness.
He also made another legal change that requires mutual and listed funds (ETFs) to report monthly instead of quarterly portfolio companies. The rule, accepted in August under Genler, was designed to improve the transparency of the market.
Uyeda, however, noted about compliance costs and potential risks related to artificial intelligence-driven data analysis. He added that the SEC investigates possible adjustments to the rule, including the expansion of the compliance deadline.
Uyeda also emphasized the importance of revising the definitions of small entities to calibrate legal costs correctly.
The supervisor refines its procedures for assessing economic effects, legal and compliance costs and other professional costs in connection with the regulations.
Uyeda emphasized that the guarantee of customer assets, financing disclosures and digital engagement practices – such as predictive data analyzes – regarding areas of regulatory research.