The U.S. Securities and Exchange Commission’s (SEC) interim chief, Mark Uyeda, says that Wall Street’s top regulator is considering revising or eliminating rules from the previous administration that imposed stricter standards on investment advisors holding cryptocurrencies and other assets.
The agency’s acting chair, Mark Uyeda, added that the watchdog was considering revisions to a recent rule requiring mutual and exchange-traded funds to report monthly rather than quarterly portfolio holdings.
The SEC proposed changes to the custody rule
During a conference for the investment industry in San Diego on March 17, Uyeda laid out plans for a major departure from the way the former administration of President Joe Biden managed Wall Street.
In a copy of his prepared remarks, he stated that the SEC “needs to prioritise effective and cost-efficient regulations that respect the limits of our statutory authority.”
Two years ago, former SEC Chair Gary Gensler proposed changes to the custody rule with Uyeda’s support, claiming that they would help prevent investment advisers from “using, losing, or abusing” their clients’ assets. However, Uyeda said that since then, public comments have criticised its “broad scope.”
Gensler issued several rulings that were challenged in court. One of them was the rule requiring more frequent reporting, which was adopted in August.
At the time, Gensler claimed it would encourage more openness. Still, according to Uyeda, people have expressed increased concerns about the increased frequency of the required reporting due to advancements in AI. Uyeda stated that the timeframe for achieving compliance might also be prolonged.
President Trump elected a new SEC chair, former SEC Commissioner Paul Atkins, in December. He is expected to succeed Uyeda, but Senate confirmation hearings have not yet been set. The White House has called for significant staff reductions at the agency, but plans have not yet been released.
Trump’s executive actions shift from the previous administration’s crypto regulatory approach.
Concerning revising or doing away with rules put in place during the prior administration, President Trump sharply departed from the regulatory approach under President Joe Biden’s administration during his few days in office.
Trump has used his executive authority to support cryptocurrency businesses and the wider adoption of digital assets.
On Jan. 23, Trump signed the executive order creating the Working Group on Digital Asset Markets to help advise the government on crypto-friendly policy.
The approach implemented strict measures to combat money laundering and fraud in the cryptocurrency industry.
Furthermore, they also discussed lifting certain regulations that presented difficulties for the cryptocurrency industry. These measures could ease financial hardships and increase cryptocurrency trading.
One potential target was the Securities and Exchange Commission’s (SEC) 2022 “SAB 121” accounting guidance. It had drawn criticism for increasing expenses for companies that attempted to hold cryptocurrency for third parties, particularly banks.
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