July

• AML Rule for Investment Advisers – Effective Date Delayed to 2028: The US Treasury has postponed the effective date of the Investment Adviser Anti-Money Laundering Rule from January 1, 2026 to January 1, 2028. As currently proposed, the rule would bring certain investment advisers under the Bank Secrecy Act, prescribe minimum standards for AML/CFT programs, and require advisers to report suspicious activity. During the extended period, FinCEN (Financial Crimes Enforcement Network) and the SEC plan to revisit the substance of the AML Rule, along with the jointly proposed rule on customer identification program requirements for registered investment advisers and exempt reporting advisers. Advisers should monitor future rulemaking regarding these issues and participate in the comment process as FinCEN and the SEC revisit the AML Rule.
• Tokenized Securities Subject to Federal Securities Laws: The SEC has affirmed that “tokenized securities are still securities” and therefore remain subject to federal securities laws. As digital asset regulation is implemented in the US, Commissioner Peirce’s reminder that tokenized securities are subject to federal securities laws is timely.
• Retail Investors and Finders: The SEC has noted that Regulation A, which exempts certain small public offerings from SEC registration, was designed to help retail investors diversify their portfolios by investing in smaller companies, and that finders can help connect small businesses with investors. To support this ecosystem, the Commission is exploring an exemption from broker registration for finders, as reflected in its call for discussion on whether the 2020 Proposal is an appropriate starting point or if a different approach would be more effective, as well as in recent remarks from the SEC Chairman highlighting the need for regulatory solutions in this area. Stakeholders should monitor future updates from the SEC regarding a finders exemption but comply with the significant current restrictions on finders until an exemption is available.
• Project Crypto – Key Components of Chairman Atkin’s Vision: The SEC Chairman announced the launch of “Project Crypto,” a Commission-wide initiative to modernize securities rules and regulations to enable US financial markets to move on-chain. Key components include: establishing a regulatory framework for crypto asset distributions; modernizing custody requirements for registered intermediaries; facilitating “super-apps” that enable multiple business lines under a single license; integrating DeFi and other on-chain software into US markets through amendments to Regulation National Market System (NMS); and introducing an innovation exemption. With the signing of the Governmental Engagement for New Innovations in US Securities (GENIUS) Act and passage of the Clear Law and Regulation for Innovation in Technology (CLARITY) Act in the House, digital asset regulation is coming – stakeholders should be ready.

August

• New FBOT Registration Framework: The Commodity Futures Trading Commission (CFTC) has issued an advisory on the registration framework for foreign boards of trade (FBOTs). The framework enables certain non-US exchanges, already subject to foreign regulatory oversight, to offer direct access to traders in the United States by registering with the CFTC as FBOTs instead of designated contract markets. Managers may soon be able to access a greater number of FBOTs, particularly digital asset platforms in foreign jurisdictions.
• Management Fee Practices – Focused SEC Enforcement: The SEC recently settled with a middle market private equity fund adviser over breaches of fiduciary duty related to management fee offset calculations, including inadequate disclosure of interest on deferred transaction fees and improper duplication of transaction fee reductions. The adviser was charged with willful violations of Section 206(2) of the Investment Advisers Act of 1940 and agreed to pay disgorgement and a civil penalty. Managers are encouraged to proactively review their fee calculation and disclosure practices to ensure compliance and avoid similar enforcement actions.

September

• Regulatory Treatment of Foreign Private Issuers and Retail Investor Access: The SEC Investor Advisory Committee held panel discussions on potential reforms to the eligibility criteria and regulatory treatment of foreign private issuers, as well as draft recommendations regarding retail investor access to private market assets. Non-US managers should monitor future SEC updates regarding the regulatory treatment of non-US private issuers. Growth in the retailization of private markets may bring increased regulatory scrutiny in the future.
• Criminally Liable Regulatory Offenses – Policy Statement on DOJ Referrals: The CFTC has issued a policy statement describing its plan to address criminally liable regulatory offenses, including a set of factors staff should consider when determining whether to refer potential violations to the DOJ, such as the harm caused, potential gain, the defendant’s expertise, knowledge of the unlawfulness of the conduct, recidivism, and whether the DOJ’s involvement would provide additional protection to market participants. The policy statement, along with the CFTC’s report anticipated by May 9, 2026, provides clarity on the types of regulatory offenses that may result in criminal liability.
• SEC-CFTC Cross-Agency Crypto Initiative: The SEC and CFTC jointly announced a cross-agency initiative, building on the SEC’s Project Crypto and the CFTC’s Crypto Sprint, to coordinate efforts on enabling the trading of certain spot crypto asset products. They clarified that current law does not prohibit SEC- or CFTC-registered exchanges from facilitating trading in these products, and that the agencies’ collaboration aims to promote trading venue choices and optionality for US market participants. In a related development, Acting CFTC Chairman Pham recently outlined the US crypto roadmap, referencing the President’s Working Group recommendation that the SEC and CFTC: (i) facilitate digital asset trading at the federal level by offering clear regulatory guidance on key issues such as registration, custody, trading, and recordkeeping; and (ii) support the timely introduction of innovative financial products by leveraging tools like safe harbors and regulatory sandboxes. Key developments include: enactment of the GENIUS Act establishing a federal framework for stablecoins; the House’s passage of the CLARITY Act and other digital asset market structure bills; launch of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, aimed at providing regulatory clarity for digital assets; and the CFTC’s issuance of a framework for registering and recognizing non-US exchanges and FBOTs. Digital asset regulation is coming and SEC and CFTC collaboration on the creation and implementation of crypto regulations may result in unexpected outcomes.
• Delayed Implementation of Rules 10c-1a and 13f-2, Form SHO: The SEC Chairman has directed staff to address a US court of appeals’ opinion holding that the SEC had not properly considered the cumulative economic impact of Rule 10c-1a (reporting of securities loan), Rule 13f-2 (short position and short activity reporting by institutional investment managers), and related Form SHO. Stakeholders should monitor SEC updates and anticipate that implementation of these rules will be delayed or vacated.
• SEC Policy Direction – Commitment to Clear Rules: As part of the SEC’s Project Crypto, Chairman Atkins affirmed that policy will now be set by clear and predictable rules rather than ad hoc enforcement actions. Clear and predictable rules are helpful in efficiently implementing new regulations; however, objective rules, rather than principles-based rules, can create difficulties in emerging or uncertain areas not contemplated by the objective standards.
• CFTC Spring 2025 Unified Agenda: The CFTC reaffirmed its mission to promote market integrity and liquidity in the commodity derivatives markets, noting that the agency is working on addressing “unworkable Dodd-Frank rules and broad overreach.” The Agenda included rules covering topics such as event contracts, swap dealer business conduct standards, swap data recordkeeping and reporting, cross-border application of swap dealer requirements, block trade reporting, and margin requirements for uncleared swaps. Expect further rule amendments in the coming months ahead.