Welcome to SEC Roundup, a bimonthly video collection by former Securities and Trade Fee senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Alternative Advocates Community.
On this episode, Morgan and ICAN advisory board member Rodrigo Seira of Cooley are joined by Miles Jennings, head of coverage and common counsel at Andreessen Horowitz (a16z), to interrupt down a well timed and impactful proposal for the SEC. Andreessen Horowitz (a16z) and the DeFi Training Fund are proposing a “secure harbor” from SEC dealer registration for fintech functions that don’t current the dangers the regulation was designed to deal with.
Jennings, alongside the DeFi Training Fund, just lately submitted the secure harbor request to SEC Commissioner Hester Peirce that goals to offer clear, actionable steering for builders within the decentralized finance house.
On the coronary heart of the dialog is a deceptively easy however vital query: Who truly must register as a broker-dealer?
The secure harbor would clarify that fintech apps with the next limits wouldn’t must register as securities brokers:
— Be non-custodial (not take custody of person belongings)
— Not train discretion over the execution of person transactions
— Not actively solicit investments or present funding suggestions
— Combine with decentralized blockchain networks and protocols
The present regulatory ambiguity not solely threatens to stifle innovation — it additionally opens the door to pricey, pointless enforcement in opposition to respectable initiatives. Jennings explains how the checklist-style secure harbor he co-authored would supply builders with readability, whereas nonetheless defending customers and preserving the SEC’s capacity to behave in bad-faith circumstances.
