Fidelity Calls On SEC To Bring Crypto Trading Into Traditional Brokerage Accounts

• Fidelity Investments urged the Securities and Exchange Commission to develop rules that would allow broker-dealers to trade crypto assets on Alternative Trading Systems.
• The $18 trillion asset manager made four specific recommendations, including guidance on tokenized securities trading and clarifying on-chain settlement rules.
• Fidelity’s letter was in response to a request from the SEC Commissioner Hester Peirce, submitted in December last year on crypto asset trading.

The $18 trillion asset manager Fidelity Investments called on the Securities and Exchange Commission (SEC) on Friday to establish a regulatory framework that would allow investors to trade crypto assets directly in their brokerage accounts.

In a five-page comment letter addressed to the SEC's Crypto Task Force, Fidelity General Counsel Roberto Braceras urged the commission to develop rules permitting broker-dealers to offer, custody, and trade crypto assets on Alternative Trading Systems (ATS) platforms that worked similarly to traditional stock exchanges, but operated outside the main exchange framework.

Fidelity made four specific recommendations to the SEC: developing a regulatory framework for broker-dealers, issuing guidance on the trading of tokenized securities on ATSs, considering how intermediated and disintermediated trading venues could coexist, and clarifying how on-chain systems could be integrated into existing securities markets.

Fidelity also added that the SEC “should clarify that a broker‑dealer may facilitate the settlement of on‑chain transactions without triggering the definition of a clearing agency,” which could otherwise impose additional regulatory burdens on firms handling digital asset transactions.

Fidelity Wise Origin Bitcoin Fund (FBTC) was down over 2% in pre-market trading. On Stocktwits, retail sentiment for FBTC remained in the ‘neutral’ zone, while chatter levels around it improved to ‘normal’ form ‘low’ over the past day.

The Regulatory Ask Behind The Letter

Fidelity's letter was a response to Commissioner Hester Peirce's request for information, who leads the SEC's Crypto Task Force. Last year in December, Peirce released a statement on how national securities exchanges and ATS platforms should handle crypto-asset trading.

Peirce said that trading platforms and market participants "need to be able to operate under the certainty of clear market structure rules that facilitate fair and orderly markets without imposing unnecessary burdens." 

In her request, Peirce asked how the SEC could "encourage innovation and lower barriers to entry for trading platforms that seek to trade crypto asset securities," and how existing regulations, such as Regulation ATS and Regulation National Market System (NMS), pose challenges for firms seeking to innovate with crypto assets and blockchain technology.

Read also: Nasdaq Partners With Andreessen Horowitz-Backed Firm To Build Crypto Infrastructure For Banks: Report

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