Welcome to SEC Roundup, a bimonthly video collection by former Securities and Change Fee senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Selection Advocates Community.
On this episode, Morgan and ICAN advisory board member Rodrigo Seira of Cooley are joined by Miles Jennings, head of coverage and normal counsel at Andreessen Horowitz (a16z), to interrupt down a well timed and impactful proposal for the SEC. Andreessen Horowitz (a16z) and the DeFi Schooling Fund are proposing a “protected harbor” from SEC dealer registration for fintech purposes that don’t current the dangers the legislation was designed to deal with.
Jennings, alongside the DeFi Schooling Fund, not too long ago submitted the protected harbor request to SEC Commissioner Hester Peirce that goals to offer clear, actionable steerage for builders within the decentralized finance area.
On the coronary heart of the dialog is a deceptively easy however essential query: Who really must register as a broker-dealer?
The protected harbor would clarify that fintech apps with the next limits wouldn’t have to register as securities brokers:
— Be non-custodial (not take custody of consumer property)
— Not train discretion over the execution of consumer 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 expensive, pointless enforcement in opposition to official tasks. Jennings explains how the checklist-style protected 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.
