Chief Legal Architect and a co-founder of Caffrey.AI
Steven Lofchie is the Chief Legal Architect and a co-founder of Caffrey.AI, an AI platform built for law firms, banks, and the financial regulatory industry. He is also a partner at Norton Rose Fulbright, where he advises financial institutions on securities laws, the Commodity Exchange Act, and broker-dealer regulation. Ranked by Chambers USA every year since 2007, he is the author of “Lofchie’s Guide to Broker-Dealer Regulation,” long considered the leading treatise on the subject.
Recent Articles & Comments
Two items that firms may want to comment on:
the FICC rule proposal requires that a FICC clearing member clear all of its eligible transactions through FICC, even if another clearing agency registers with the SEC; and among FICC's proposed compliance requirements are certifications from senior officers of the clearing firm; this will be particularly onerous for non-US banks that must obtain certifications from their senior officers or directors.Whatever one thinks of the wisdom of investing in digital assets, there is substantial evidence that retail investors are put at risk by the SEC adopting guidance that effectively discourages banks from providing custodial services for those assets. The result is that investors often use unregulated entities as custodians, which does not serve them well. The SEC should consider whether SAB No. 121 does more harm than good.
Chair Benham's remarks are reasonable, but avoid the big question: "what is a non-security digital asset?" So long as the SEC claims jurisdiction over virtually all digital assets, there is not much for the CFTC to do, unless it wants to fight a jurisdictional battle with the SEC.
Notwithstanding Chair Gensler's remarks as to valuing public input, Chair Gensler's term at the SEC has been marked by comment periods that are the minimum the law allows, even for very significant rulemaking. When the SEC has made significant changes to a proposed rule, it has generally not reproposed the rule for an additional round of public comment.
Leaving aside the de minimis time that the SEC has granted for review of proposed rule changes, an even more serious problem…