SIFMA Comments on SEC Statement on Covered User Interfaces

Washington, D.C., June 16, 2026 - SIFMA filed a comment letter today with the Securities and Exchange Commission (SEC) in response to the Staff Statement Regarding Broker-Dealer Registration of Certain User Interfaces Utilized to Prepare Transactions in Crypto Asset Securities issued by the Division of Trading and Markets. In the letter, SIFMA notes its appreciation for the SEC's efforts to provide regulatory clarity for emerging technologies and encourages the SEC to proceed with a notice-and-comment rulemaking process to address important unresolved questions. This process, the letter notes, creates a durable, comprehensive regulatory framework that both benefits market participants and ensures markets are subject to longstanding investor protection and market integrity principles.

"SIFMA appreciates the SEC's efforts to provide regulatory clarity for emerging technologies, and we have long supported innovation in the U.S. capital markets," said SIFMA president and CEO Kenneth E. Bentsen, Jr. "Distributed ledger technology and tokenization hold genuine promise for enhancing market efficiency, transparency, and accessibility as we rethink markets and market structure. A comprehensive regulatory framework developed through inclusive processes that balance innovation with the investor protection principles that have long underpinned the integrity of U.S. securities markets is essential for realizing these benefits, and we look forward to continued constructive engagement with the SEC on these issues."

SIFMA's comments focus on the following areas:

Clarifying the Application of Broker-Dealer Principles to Covered User Interface (CUI) Activity: The Statement is a major change from the historical interpretation of the broker definition under Section 3(a)(4) of the Exchange Act, and raises important questions about determining what combination of activities would trigger broker registration requirements.

Process, Durability, and the Need for Formal Rulemaking: The Staff Statement has significant market structure implications, which underscores the need for a notice-and-comment rulemaking process. Integrating on-chain operating models such as wallets and covered user interfaces (CUIs) through a comprehensive rulemaking process with opportunities for industry engagement will ultimately put these models on a more durable footing and provide a robust regulatory framework which can support broad industry innovation that has positive, sustainable impacts on our U.S. securities markets.

Need for Structured Oversight of CUIs: CUI Providers (as defined in the Staff Statement) operating within the parameters of the Staff Statement would remain unregistered and outside the SEC's existing surveillance frameworks, which could limit the SEC's understanding of the development and evolution of a key element of the emerging tokenized securities landscape. This may make it difficult for the Commission to track whether the Staff Statement has been successful in fostering market development, thereby making it challenging to design and implement durable rules that can accommodate on-chain operating models. Additionally, without appropriate monitoring mechanisms, it may be difficult to identify actions that can harm investors or markets until after the fact.

Gaps in Market Coverage and Regulatory Framework Considerations: The Staff Statement provides a pathway for digital assets in one type of activity: CUIs and wallets working with clients who are not otherwise registered (likely largely retail clients but potentially crypto native institutions) engaging in user-initiated transactions via self-custodial wallets. If the SEC's approach is to address CUIs through a Staff statement (rather than through formal rulemaking as articulated above), the Division staff should more comprehensively address how the Staff Statement applies to registered market participants, custodial wallet providers, or the broader ecosystem of intermediaries that are expected to interact with tokenized securities. Integrating wallets into the broader regulatory framework will allow innovation without regulatory arbitrage and drive greater on-chain innovation and adoption by the securities industry more broadly.

The comment letter is available at the following link: https://www.sifma.org/advocacy/letters/staff-statement-regarding-broker-dealer-registration-of-cuis-utilized-to-prepare-transactions-in-crypto-asset-securities

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry's one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).