Fidelity Investments urged the U.S. Securities and Exchange Commission (SEC) to develop a clear regulatory framework enabling broker‑dealers to offer, custody and trade crypto assets on alternative trading systems (ATS). The submission, sent in response to the SEC Crypto Task Force’s request for comments, calls for comprehensive rules covering tokenized securities trading, including trades in tokenized instruments issued by third parties.
Fidelity highlighted that tokenized instruments vary widely in issuance structure, legal treatment and valuation. Tokenized real‑world assets (RWAs) can represent asset classes as diverse as equities, real estate, bonds or private credit. The firm noted that tokenization models differ in the rights they confer: in some cases a crypto asset reflects an indirect interest in an underlying security via a securities entitlement; in others, the crypto asset may function as a securities‑based swap, which may only be sellable to eligible contract participants.
The letter also asked the SEC to address the regulatory gap between centralized and decentralized trading venues, urging the agency to consider how intermediated and disintermediated markets can coexist. Fidelity recommended revising reporting requirements to account for the operational realities of decentralized finance (DeFi) platforms and other disintermediated systems, which lack a central authority capable of producing the detailed financial reports the SEC currently expects.
Fidelity further proposed that the SEC provide guidance permitting broker‑dealers to use distributed ledger technology for ATS operations and recordkeeping. Updating reporting rules to reflect DLT use, the firm said, would remove undue burdens on decentralized systems.
Under Chair Paul Atkins, the SEC has signaled support for 24/7 capital markets and has allowed financial firms to pilot tokenized trading experiments. Separately, U.S. banking regulators—the Federal Reserve, FDIC and OCC—issued a joint policy statement saying tokenized securities are subject to the same banking capital requirements as the underlying assets. The agencies emphasized that the technology used to issue or transact a security generally does not change its capital treatment.