Fidelity Investments, one of the world's largest asset managers, has formally called on the U.S. Securities and Exchange Commission (SEC) to accelerate the integration of crypto assets into the existing regulated market infrastructure. The firm submitted a detailed response to the SEC's Crypto Task Force, led by Commissioner Hester Peirce, arguing that current U.S. market systems are already equipped to handle crypto trading without requiring entirely new frameworks.
Fidelity's core argument is that the existing National Market System (NMS), which connects thousands of participants across 29 exchanges and over 113 alternative trading systems (ATS) daily, provides a robust foundation. Governed by established rules like the Securities Exchange Act of 1934 and Regulation NMS, this system enables efficient and transparent trading. Fidelity contends that integrating crypto assets here would expand market access and improve operational efficiency while maintaining investor protection and market integrity standards.
The firm, which serves over 50 million individuals and institutions, highlighted the role of its broker-dealer, National Financial Services LLC, which already operates an ATS within the NMS. Fidelity emphasized a "critical" need for the SEC to develop a comprehensive regulatory framework with clear rules for trading tokenized securities, including those issued by third parties. The letter, signed by General Counsel Roberto Braceras, noted the complexity of tokenized instruments, which span asset classes like equities, real estate, bonds, and private credit, each with different legal structures and valuation models.
Furthermore, Fidelity urged the SEC to bridge the regulatory gap between centralized and decentralized trading systems. The firm recommended overhauling existing reporting requirements to reflect that decentralized finance (DeFi) platforms and other "disintermediated" systems cannot produce the detailed financial reports required by the SEC due to the lack of a central authority. Fidelity also asked the SEC to issue guidance permitting broker-dealers to use distributed ledger technology for ATS and other recordkeeping purposes.
The SEC, under Chairman Paul Atkins, has signaled support for 24/7 capital markets and approved financial companies to experiment with tokenized trading. This push aligns with a broader regulatory view, as evidenced by a March joint policy statement from the Federal Reserve, FDIC, and OCC, which stated that tokenized securities are subject to the same banking capital requirements as their underlying assets.
