The United States Securities and Exchange Commission has been in the news for what people might consider the wrong reasons, but to them, it is the right reasons. The SEC was previously rumored to be making moves to slam a lawsuit on remittance outfit Ripple over the sale of what it termed securities.
However, the lawsuit was officially made official days ago as the regulatory body sure Ripple to court over selling unregistered securities. Even though further details of the case are still pending, the United States Securities and Exchange Commission has released a statement where it said that outfits that wish to list securities would first be allowed to do so without registering for just five years.
Broker-dealers sought clarity over the new securities law
The latest development is coming off the back of several outcries by brokers dealing in several securities. They asked the Securities and Exchange Commission to explain if they can hold securities under the law. The new law means that the Securities and Exchange Commission will allow only those registered to hold the digital assets for the stipulated time. This means that firms that are not registered initially as a broker-dealer will not enjoy the benefits.
This also means that the United States Securities and Exchange Commission will not be slamming any lawsuit against registered broker-dealer who wishes to list certain digital assets regarded as securities in the crypto sector. Giving their insightful details into what the rule entails, the SEC said that the law requires that the broker be responsible for the digital assets that their customers have duly paid for and signed over to keep. The SEC also mentioned that any broker-dealer hoping to carry out the listing should ensure that it deals majorly in securities, not to risk going against other laws regarding securities.
SEC clarifies the new securities law
The United States SEC also says that the broker-dealer must follow certain policies associated with holding securities, such as helping their customers reduce the risk related to investment and disclosing certain high-risk securities to its clients. The United States Securities and Exchange Commission failed to address if holding the private keys to your customer’s wallet is enough to show that a broker-dealer is in charge of the account.
Another thing that is difficult for a broker-dealer, as mandated by the SEC, is that the broker should provide specific details that will be added to its books to show that it is in charge of the said securities. The Securities and Exchange Commission says that it wants to provide a standard for holding securities as it is being done in countries worldwide. Such standards would help the agency determine the kind of law it will set for broker-dealers to follow. This new law also bars previously registered broker-dealer to start accumulating material Securities without approval from the body.
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