April 20, 2021

Volume XI, Number 110

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April 20, 2021

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April 19, 2021

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SEC Examination Risk Alert Signals Focus on Digital Asset Securities

On February 26, 2021, the SEC’s Division of Examinations issued a Risk Alert signaling an exam focus this year on activities of investment advisers, broker–dealers, exchanges, and transfer agents related to Digital Asset Securities, defined as assets distributed and/or transferred using distributed ledger or blockchain technology. This Risk Alert foreshadows an expected area of priority for new SEC Chair Gary Gensler, who as a professor at MIT has written and taught on blockchain and cryptocurrency issues. For investment advisers, the Alert indicated an exam focus on compliance policies related to Digital Asset Securities in the areas of portfolio management, books and records requirements, the custody rule, risk disclosures, valuation issues, and registration requirements. For broker–dealers, examinations will focus on the safekeeping of funds and operations, registration requirements, anti–money laundering (“AML”) programs, offerings, conflict of interest disclosures, and outside business activities. For exchanges, examinations will focus on exchange registration issues and compliance with Regulation ATS. Finally, for transfer agents, examinations will focus on compliance with rules related to the clearance and settlement of Digital Asset Securities transactions.

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© 2021 Foley & Lardner LLPNational Law Review, Volume XI, Number 64
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Thomas J. Krysa Litigation Attorney Foley & Lardner Denver, CO
Partner

Thomas J. Krysa is a partner and litigation lawyer with Foley & Lardner LLP. Tom is based in the firm’s Denver office where he is a member of the Securities Enforcement & Litigation Practice. His practice focuses on advising clients in securities enforcement and litigation matters, government investigations, and complex commercial disputes. Tom, a former SEC senior officer and federal prosecutor, brings extensive government experience to the forefront to solve his clients’ problems short of government action, while at the same time preserving their interests should litigation and...

720-437-2010
Peter D. Fetzer, Securities Lawyer, Foley Lardner, Mergers Attorney
Partner

Peter Fetzer is a partner and business lawyer with Foley & Lardner LLP. His practice focuses primarily in the areas of securities regulation, mergers and acquisitions, corporate governance and general corporate counseling to mutual funds, exchange traded funds, publicly traded investment advisers and public companies.

414.297.5596
Stephen M. Meli Business Attorney Foley & Lardner Boston, MA
Partner

Stephen M. Meli is a partner and business lawyer with Foley & Lardner LLP. Steve is based in the firm’s Boston office where he is a member of the Transactions Practice and focuses on fund formation, emerging and spin-out fund sponsors and institutional investor representation.

Fund Formation Experience

Steve focuses his practice on lower and middle market buyout, venture capital, growth equity, credit and similar private funds, including funds-of-funds and secondary funds.

With an emphasis on commercial sense and practicality, Steve advises sponsors on every...

617-226-3107
Stuart E. Fross, Foley Lardner, Securities lawyer, Finance Attorney
Partner

Stuart Fross is a partner and business lawyer with Foley & Lardner LLP where he concentrates his practice on securities laws and regulations, as part of the Private Equity & Venture Capital, Transactional & Securities and International Practices.

Mr. Fross’ main focus is investment managers and pooled investment vehicles, including U.S. registered open-end, closed end and exchange traded funds, bank collective investment funds (with an emphasis a stable value funds), UCITS funds, as well as private funds, organized in the US and...

617-50-3382
Margaret Nelson Financial Attorney Foley & Lardner
Of Counsel

Margaret Gembala Nelson is of counsel with Foley & Lardner LLP, where she represents accounting firms, financial service entities, corporations and their professionals in auditor liability matters, government enforcement investigations and examinations, and complex securities and business litigation. She also conducts internal investigations on behalf of clients and advises on regulatory compliance and risk management issues.

Margaret has more than 15 years of experience as a regulatory and litigation lawyer focusing on complex securities, accounting, compliance, and commercial...

312.832.4376
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