The SEC signals regulatory clarity for payments stablecoins, allowing broker-dealers to apply a 2% net capital haircut and paving the way for broader tokenized securities activity under existing rules.
SEC Clarifies Broker-dealer Treatment of Payment Stablecoins Under Net Capital Rule
The United States Securities and Exchange Commission (SEC) Division of Commerce and Markets issued a new FAQ on February 19 on crypto asset activities. The guidelines related to payment stablecoins within the framework of broker financial responsibility rules. Commissioner Hester M. Peirce expressed her support and invited the public to contribute.
Commissioner Peirce said:
“The FAQ provides that Staff would not object to a broker-dealer applying a 2% haircut to proprietary positions in a payment stablecoin when calculating its net capital. I appreciate the Staff’s approach.”
She also said: “Stablecoins are essential for transactions on the blockchain rails. The use of stablecoins will allow brokers to engage in a wider range of trading activities related to tokenized securities and other crypto assets.”
The Division of Commerce and Markets has issued FAQs to clarify how broker-dealers may treat proprietary positions in payment stablecoins under Rule 15c3-1 of the Exchange Act, commonly known as the Net Capital Rule. Staff indicated that it would not object to a 2% haircut when firms calculate net capital, providing additional certainty as regulated entities evaluate tokenized securities and other blockchain-based financial products. The clarification describes how existing capital standards may apply to payment stablecoins within the current regulatory framework governing the financial responsibility of brokers.
The division detailed its views on broker-dealer custody requirements, capital processing, transfer agent registration, operations of national securities exchanges and alternative trading systems, clearing and settlement functions, and exchange-traded products related to crypto assets. Staff emphasized that the responses reflect its opinions only, have no legal force or effect, do not change applicable law, and do not create any new obligations.
The document explains how Rule 15c3-3 applies to securities of crypto assets, clarifies that compliance with the Commission’s 2020 Special Purpose Broker Statement is not required, explains how the Securities Investor Protection Act of 1970 and the protections of the Securities Investor Protection Corporation apply to certain crypto assets, and describes the circumstances under which distributed ledger technology may be used for transfer agent recordkeeping.
Peirce added:
“At the Commission level, I would like to consider how Rule 15c3-1 could be extended to account for payment stablecoins.”
It welcomed comments from market participants on potential changes to the rule and invited comments on other aspects of the SEC’s regulations that they believe should be updated to account for the use of payment stablecoins by SEC-registered entities.
FAQs ⏰
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What did the SEC say about paying stablecoins under the net capital rule?
The SEC staff said it would not object to broker-dealers applying a 2% haircut to proprietary positions in payments stablecoins when calculating net capital. -
How does Exchange Act Rule 15c3-1 apply to payment for stablecoins?
The guidance clarifies that existing net capital standards may apply to stablecoin payments within the current broker-dealer regulatory framework. -
Does the SEC Crypto FAQ Create New Legal Obligations for Brokers?
No, staff stated that the FAQ reflects staff opinions only and does not create any new obligations or changes to applicable law. -
What changes to rule 15c3-1 did Hester Peirce suggest?
Peirce said she would like the Commission to consider amending Rule 15c3-1 to better account for payment stablecoins.