Key Takeaways
- SEC and CFTC working together to explore ways to harmonize policies
- Legal status of perpetual futures one of the main challenges to be addressed
Latest Projects Concerning Digital Assets
The director of Trading and Markets at the U.S. Securities and Exchange Commission (SEC), Jamie Selway, attended a financial technology-related conference held in New York on June 4. Selway shared the latest updates on asset tokenization and cooperation with the U.S. Commodity Futures Trading Commission (CFTC).
A framework for the listing and trading of tokenized securities is being developed by the SEC, according to the commission. In the U.S. Congress, talks surrounding regulatory development are also heightening.
Talks on the harmonization of the policies of the SEC and the CFTC are also being explored, according to the SEC. There are also efforts in the pipeline to ensure a smooth transition to 5 days a week (23-by-5 trading) in the stock market by the end of this year.
The goal of the efforts, through stricter rules for both commissions, is to improve efficiency and flexibility for operators. They also aim to minimize barriers to entry for innovation.
Historically, the SEC has regulated securities while the CFTC has regulated commodities. This has resulted in conflict during the previous administration over jurisdiction over cryptocurrencies. The harmonization of policies aims to provide unified regulations for both commissions, with both signing a memorandum of understanding (MOU) in March that targets strengthening cooperation in their common regulatory field.
Challenge in the Legal Status of Perpetual Futures
Jamie Selway has cited that one of the challenges to be addressed is the legal status of perpetual futures, especially in harmonizing regulations.
Especially in the field of digital assets, the use of the term “perpetual” is widespread, Selway points out, but its regulatory standing is still not clear. The joint meeting of the SEC and CFTC held last September was divisive for the commission experts, says the director.
There were some at the meeting who insisted that classifying “perpetual futures” as futures contracts was best, while there were others who argued that present laws treat it as a swap.
Meanwhile, the CFTC decided last week to recognize Bitcoin perpetual futures trading as futures contracts based on a proposal from Calshi, a major prediction market leader. He said that perpetual futures on other assets would be considered on a case-to-case basis.
Selway said that in the coming months, he hopes to receive many points of view from the industry on how the assets should be classified.
