Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.
In this episode, Morgan and ICAN advisory board member Rodrigo Seira of Cooley are joined by Miles Jennings, head of policy and general counsel at Andreessen Horowitz (a16z), to break down a timely and impactful proposal for the SEC. Andreessen Horowitz (a16z) and the DeFi Education Fund are proposing a "safe harbor" from SEC broker registration for fintech applications that do not present the risks the law was designed to address.
Jennings, alongside the DeFi Education Fund, recently submitted the safe harbor request to SEC Commissioner Hester Peirce that aims to provide clear, actionable guidance for developers in the decentralized finance space.
At the heart of the conversation is a deceptively simple but critical question: Who actually needs to register as a broker-dealer?
The safe harbor would make clear that fintech apps with the following limits would not need to register as securities brokers:
— Be non-custodial (not take custody of user assets)
— Not exercise discretion over the execution of user transactions
— Not actively solicit investments or provide investment recommendations
— Integrate with decentralized blockchain networks and protocols
The current regulatory ambiguity not only threatens to stifle innovation — it also opens the door to costly, unnecessary enforcement against legitimate projects. Jennings explains how the checklist-style safe harbor he co-authored would provide developers with clarity, while still protecting consumers and preserving the SEC’s ability to act in bad-faith cases.
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