A “far different” regulatory posture as well as moves by the new Congress and administration on digital assets and taxes will be key areas to watch in 2025, according to the Securities Industry and Financial Markets Association, Wall Street’s trade group.
“We expect to see Congress moving on the digital assets marketplace, particularly around tokenized securities,” and SIFMA is “particularly interested in what Congress does with respect to taxes” in the new year, Ken Bentsen, SIFMA’s president and CEO, said Tuesday during the group’s state of the industry briefing.
The Trump administration announced plans “to pause much, if not all, of the pending rulemaking,” Bentsen said, noting that there are almost 20 pending rule proposals at the Securities and Exchange Commission.
SIFMA expects a “very different outlook” on those rules and a “far different posture” on regulation and rulemaking under the new administration, which “we would view as positive,” Bentsen said.
What’s not clear about the pause is how the agencies and departments apply it to implementing final rules, Bentsen said.
“We don’t know how it [the pause] applies to compliance dates," he said, "but we will find out.”
Trump Tax Cuts
As to the tax landscape, “to me it’s inconceivable that the Congress would not extend the expiring provisions of the 2017 tax bill, because those provisions largely impact individual taxpayers and the failure to address those would result in a tax increase on individual taxpayers,” Bentsen said.
The bigger question: How does Congress address any offsets to pay for extending the tax provisions?
“There’s a lot of mechanics that have to go into it, but I think do think at the end of the day Congress will extend the vast majority” of the 2017 changes, Bentsen said.
SIFMA will be watching what areas may be tapped as offsets, including the tax and status of municipal bonds, as well as retirement savings account treatment. SIFMA will advocate for maintaining tax-exempt status for municipal securities, Bentsen said.
T+1
Rulemakings notwithstanding, one of the biggest events for the markets in 2024 was the T+1 conversion, Bentsen said, with the move from T+2 to T+1, which culminated after a three-year effort over the Memorial Day weekend.
“This was a very major undertaking on the part of the industry, including both the buy side and the sell side,” Bentsen said, as well as market infrastructure.
“We will be watching to see as U.K. and Europe and other jurisdictions move toward a T+1 and what impact that will have across borders,” Bentsen said.
SIFMA CEO Ken Bentsen. Credit: Bloomberg
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