Request of the SEC
On December 12, Templum issued a formal letter to the SEC, outlining not only the potential impact that blockchain can have on various industries, but recommendations for asset treatment.
What did it entail?
Digital securities as a whole clearly need clarity. However, the request on behalf of Templum focused, primarily, on ‘guidance related to post-trade activities in the digital asset space.’
After listing various examples in detail that require guidance, Templum leaves the SEC with 3 simple points of recommendations. The following points are a directly from their letter:
- Clearly define when a blockchain technology platform must register as a clearing corporation and define how blockchain technology may be used by such firms.
- Provide clear guidance to the industry as to when a blockchain technology platform must register as a transfer agent and provide guidance to issuers of digital assets as to when they must use a transfer agent.
- Modernize the Custody Rule and the Customer Protection Rule to take in to account and encourage the use of blockchain technology’s ability to track securities transactions.
Closing out their request, Templum imparted their positive view on the potential of blockchain. They stated, “We believe that blockchain is a potent modernizing force in financial services. Blockchain has the potential to increase efficiencies in post-trade mechanics and increase auditability, both benefits that would greatly benefit the industry. In order to best take advantage of this potential, the SEC must modernize regulations related to clearance and settlement.”
The full request from Templum can be viewed HERE.
Not the first request
It should be noted that Templum is not the first to request clarity from the SEC. In September, 12 members of Congress implored the SEC to do the same.
This particular request was the result of a meeting in Washington. The meeting involved not only politicians, but individuals from within both the world of crypto, and wall-street.
Might be in vain
Despite the murky waters in which blockchain resides, requests on behalf of the SEC may soon become a moot point.
Recently making headlines has been the push for the re-classification of digital assets on behalf of multiple Senators. This particular charge is led by Congressman, Warren Davidson, who hopes to develop a new set of rules, better suited for modern technology. A far cry from the securities definition created 72 years ago.
SEC – A Brick Wall
Months ago, SEC chairman, Jay Clayton, made it explicitly clear that they would not be changing to definition of securities. At the time, Clayton stated, “We are not going to do any violence to the traditional definition of a security that has worked for a long time…We've been doing this a long time, there's no need to change the definition.”
The SEC has every right to take this stance. However, the requests for guidance from various entities indicates that the SEC has not clearly articulated themselves.
It is baffling that at this point the SEC has not released better clarification on how digital assets are governed.
Templum was founded in 2017, and is based out of New York City. Above all, Templum specializes in offering blockchain services tailored towards digital securities. This includes platforms for both secondary markets and initial fundraising efforts.
In a past interview with Forbes, Templum cofounder, Vincent Molinari, best described what it is that Templum does. He stated, “Templum is a fintech and blockchain holding company that is focused on the modernization of securities law that intersects with the most innovative technologies. Templum will continue to create new market infrastructure in clearance, settlement, custody and transfer of digital assets as securities to create standardization, best practice, and investor protection and will allow large pools of institutional capital to enter the digital frontier market.”