Sec. 107. Notice of intent to register for digital asset brokers, dealers, and trading systems
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Any person may file a notice of intent to register with the Securities and Exchange Commission (in this section referred to as the Commission ) as— a digital asset trading system, for a person intending to register as a digital asset trading system under section 6(m) of the Securities Exchange Act of 1934; a digital asset broker, for a person intending to register as a digital asset broker under section 15H of the Securities Exchange Act of 1934; or a digital asset dealer, for a person intending to register as a digital asset dealer under section 15H of the Securities Exchange Act of 1934. A person filing a notice of intent to register under paragraph
(1)shall be in compliance with this section if the person— submits to the Commission and continues to materially update a statement of the nature of the registrations the filer intends to pursue; submits to the Commission and continues to materially update the information required by subsections
(b)and (c); complies with the requirements of subsection (d); and is a member of a national securities association registered under section 15A of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o–3 ) and complies with the rules of the association, including the rules of the association pertaining to customer disclosures and protection of customer assets. A person filing a notice of intent to register under subsection
(a)shall disclose to the Commission the following: Information concerning the management of the person, including information describing— the ownership and management of the person; the financial condition of the person; affiliated entities; potential conflicts of interest; the address of the person, including— the place of incorporation; the principal place of business; and an address for service of process; and a list of the States in which the person has operations. Information concerning the operations of the person, including— a general description of the person’s business and the terms of service for United States customers; a description of the person’s account approval process; any rulebook or other customer order fulfilment rules; risk management procedures; a description of the product listing process; and anti-money laundering policies and procedures. A person filing a notice of intent to register under subsection
(a)shall provide to the Commission and the Commodity Futures Trading Commission a detailed description of— the specific characteristics of each digital asset listed or offered for trading by the person, including information regarding the digital asset’s market activity, distribution, and functional use; and the product listing determination made by the person for each asset listed or offered for trading by the person. A person filing a notice of intent to register under subsection
(a)shall comply with the following requirements: Except to the extent otherwise specifically provided by Commission or a national securities association rule, regulation, or order, the person may not permit an individual who is subject to a statutory disqualification (as defined under section 3(a) of the Securities Exchange Act of 1934) to effect or be involved in effecting transactions on behalf of the person if the person knows, or in the exercise of reasonable discretion should know, the individual is subject to a statutory disqualification. The person shall keep their books and records open to inspection and examination by the Commission and any national securities association of which they are a member. The person shall disclose to customers— information about the material risks and characteristics of the assets listed for trading on the person; information about the material risks and characteristics of the transactions facilitated by the person; information about the location and manner in which the digital assets of the customer will be and are custodied; information concerning the person’s policies and procedures related to the protection of customers’ data; and in their disclosure documents, offering documents, and promotional material— in a prominent manner, that they are not registered with or regulated by the Commission; and the contact information for the whistleblower, complaint, and reparation programs of the Commission. The person shall— hold customer money, assets, and property in a manner to minimize the risk of loss to the customer or unreasonable delay in customer access to money, assets, and property of the customer; treat and deal with all money, assets, and property, including any rights associated with any such money, assets, or property, of any customer received as belonging to the customer; segregate all money, assets, and property received from any customer of the person from the funds of the person, except that— the money, assets, and property of any customer may be commingled with that of any other customer, if separately accounted for; and the share of the money, assets, and property, as in the normal course of business are necessary to margin, guarantee, secure, transfer, adjust, or settle a contract of sale of a digital asset, may be withdrawn and applied to do so, including the payment of commissions, brokerage, interest, taxes, storage, and other charges lawfully accruing in connection with the contract of sale of a digital asset. This section shall not prevent or be construed to prevent the person from adding to the customer money, assets, and property required to be segregated under subparagraph
(A)additional amounts of money, assets, or property from the account of the person as the person determines necessary to hold money, assets, or property equal to or in excess of the total digital asset obligation of the person. Any money, assets, or property deposited pursuant to clause
(i)shall be considered customer property within the meaning of this subsection. A person who has filed a notice of intent to register under this section and is in compliance with this section shall be exempt from Commission rules and regulations pertaining to registering as a national securities exchange, broker, dealer, or clearing agency, for activities related to a digital asset. Paragraph
(1)shall not apply if, after notice from the Commission and a reasonable opportunity to correct the deficiency, a person who has submitted a notice of intent to register is not in compliance with this section. Paragraph
(1)shall not be construed to limit any fraud, anti-manipulation, or false reporting enforcement authority of the Commission, the Commodity Futures Trading Commission, a registered futures association, or a national securities association. Paragraph
(1)shall not be construed to limit the authority of the Commission and the Commodity Futures Trading Commission to jointly require a person to delist an asset for trading if the Commission and the Commodity Futures Trading Commission determines that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act. A person may not file a notice of intent to register with the Commission after the Commission has finalized its rules for the registration of digital asset brokers, digital asset dealers, digital asset trading systems, and notice-registered clearing agencies, as appropriate. Subsection (e)(1) shall not apply to a person who has submitted a notice of intent to register if— the Commission— determines that the person has failed to comply with the requirements of this section; or denies the application of the person to register; or the digital asset broker, digital asset dealer, or digital asset trading system that filed a notice of intent to register failed to apply for registration as such with the Commission within 180 days after the effective date of the Commission’s final rules for the registration of digital asset brokers, digital asset dealers, and digital asset trading systems, as appropriate. It shall be unlawful for any person to provide false information in support of a filing under this section if the person knew or reasonably should have known that the information was false. A national securities association may adopt and enforce rules written specifically for persons filing a notice of intent to register under subsection (a), including rules that prescribe reasonable fees and charges to defray the costs of the national securities association related to overseeing such persons. With respect to a provisional rule described under paragraph
(1)filed with the Commission, the Commission shall— not later than 90 days following the date of such filing, approve the rule if the Commission determines that the rule effectuates the purposes of this section; and make such approval on a summary basis pursuant to section 19(b)(3)(B) of the Securities Exchange Act of 1934. For purposes of section 21F of the Securities Exchange Act of 1934 ( 15 U.S.C. 78u-6 ), the term securities laws includes this section.
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- 15 USC 78o–3
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Sec. 107
Notice of intent to register for digital asset brokers, dealers, and trading systems
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