FINRA Wants Info on BDs’ Digital Asset Activity
In a just-released Reg Notice, FINRA wants BDs to “promptly notify” the self-regulator.
The Financial Industry Regulatory Authority is polling broker-dealers on their activities related to digital assets, such as cryptocurrencies, and wants broker-dealers to “promptly notify” the self-regulator if the firm is or intends to engage in such activity.
In Regulatory Notice 18-20, FINRA states that each BD firm or its affiliates should promptly tell FINRA if they currently engage, or intends to engage, in activities related to digital assets, including digital assets that are non-securities.
The Notice is designed to help FINRA “ascertain the extent of FINRA member involvement related to digital assets.”
Activities of interest to FINRA if undertaken (or planned) by a broker-dealer or its associated persons or affiliates related to digital assets, include:
- purchases, sales or executions of transactions in digital assets;
- purchases, sales or executions of transactions in a pooled fund investing in digital assets;
- creation of, management of, or provision of advisory services for, a pooled fund related to digital assets;
- purchases, sales or executions of transactions in derivatives (e.g., futures, options) tied to digital assets;
- participation in an initial or secondary offering of digital assets (e.g., ICO, pre-ICO);
- creation or management of a platform for the secondary trading of digital assets; or
- custody or similar arrangement of digital assets.
Until July 31, 2019, FINRA states in the Reg Notice, it encourages each firm to keep FINRA abreast of changes “in the event the firm, or its associated persons or affiliates, determines to engage in activities relating to digital assets not previously disclosed.”