Fidelity Urges SEC for “Bright-Line” Standards in New Crypto Filing

Key Takeaways

• Bright-Line Standards: Fidelity advocates for clear regulatory classifications of tokenized securities to prevent unintended legal violations.
• On-Chain Efficiency: The proposal seeks to allow broker-dealers to utilize on-chain settlement without triggering “clearing agency” status.
• Market Surveillance: The firm emphasizes that price discovery and transparency must remain consistent across traditional and digital venues.
• Evidence Packs: A new “examiner-ready” infrastructure is proposed to allow regulators to audit transactions without compromising proprietary data.

On March 20, 2026, Fidelity Investments submitted a pivotal written response to the SEC’s Crypto Task Force, calling for a more defined regulatory framework to support institutional Trading Crypto Assets. The document highlights the necessity of clear rules for Alternative Trading Systems (ATS) and the integration of on-chain recordkeeping within the traditional financial market infrastructure.

The Push for Regulatory Certainty

Fidelity’s submission focuses on the friction between legacy regulations and the unique nature of distributed ledger technology (DLT). The firm argues that for Trading Crypto Assets to reach full institutional scale, the SEC must provide a “safe harbor” or specific exemptions for tokens that adopt auditable, transparent structures.

A significant portion of the input addresses Alternative Trading Systems (ATSs). Fidelity notes that these venues currently face risks when facilitating the Trading Crypto Assets because the regulatory status of tokenized instruments can be ambiguous. By issuing “bright-line” standards, the SEC would enable ATSs to operate with the confidence that they are not facilitating unregistered offerings.

Modernizing the Settlement Layer

One of the more technical requests involves the role of broker-dealers. Fidelity suggests that current rules often force digital assets into traditional “clearing agency” silos, which can negate the speed and cost benefits of blockchain technology.

Allowing broker-dealers to maintain on-chain records would streamline the process of Trading Crypto Assets, provided that market-wide surveillance and post-trade reporting remain intact. Fidelity believes that integrating these processes into existing securities market infrastructure is the most viable path forward for the industry.

Safeguarding Market Integrity

Despite the call for innovation, the filing is clear that investor protection must not be sidelined. Fidelity proposes a tiered, auditable operational model. This framework would provide “Evidence Packs” to regulators, enabling them to reconstruct and verify royalty streams or ownership lineage without requiring the full disclosure of trade secrets.

This approach ensures that Trading Crypto Assets occurs within a “protected, yet transparent” environment, aligning with traditional trust law architecture.

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