Fidelity urges US SEC to overhaul rules for digital asset trading... "Need standards for tokenized securities"

Global asset manager Fidelity has urged the US Securities and Exchange Commission (SEC) to refine the regulatory framework for trading digital assets (cryptocurrencies) and tokenized securities.

According to Cointelegraph on the 22nd (local time), Fidelity said in a recent comment letter submitted to the SEC that regulators should establish a clear framework allowing broker-dealers to trade, custody and facilitate digital assets on alternative trading systems (ATS). The letter was filed in response to a request for public comment by the SEC’s crypto task force (TF).

Fidelity in particular stressed that updating rules for trading tokenized securities is urgent. Tokenized assets are based on a range of real-world assets (RWA) such as equities, real estate and bonds, and because their structures, legal rights and valuation methods differ, it said consistent regulatory standards are needed.

It also pointed to the need to close regulatory gaps between centralized exchanges and decentralized finance (DeFi) platforms. The firm argued that the current framework does not adequately reflect DeFi structures that lack a central intermediary, and that applying existing reporting obligations as-is could create an excessive burden.

Fidelity also proposed developing guidance that would allow broker-dealers to use distributed ledger technology (DLT) to maintain transaction records and perform clearing functions.

Meanwhile, the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) recently said in a joint statement that tokenized securities are also subject to the same capital rules as the underlying assets.