US SEC and CFTC Propose Changes to Form PF

An update to Form PF has been suggested jointly by the US SEC & CFTC.

In order to ensure more accurate reporting for major hedge funds, the plan wants to differentiate between “digital assets” and “cash and cash equivalents.”

According to the proposal, a new sub-asset class should be established for the reporting of digital assets. This indicates that these companies will be required to disclose their exposure to the cryptocurrency industry in a distinct context.

According to the proposal, digital assets are any assets that have been issued using blockchain technology. This definition includes coins, tokens, and virtual currencies, among other things.

The purpose of Form PF is to provide guidance to regulators regarding the identification of systemic threats to economic stability.

The authorities have noticed that investments in digital assets have become more prevalent and that there is a growing need to acquire more information on the exposure of these funds to cryptocurrencies. The latest market crisis brought the possibility of market contagion into much greater focus.

In the meanwhile, the authorities are soliciting feedback from the general public in order to determine whether they should refer to “crypto assets” or “digital assets.”

 

What did the Regulatory Body Write?

The regulating bodies wrote:

“In our opinion, these terms are interchangeable. We are proposing the word and meaning to be consistent with the recent statement that the SEC issued on digital assets. We believe that such terms and descriptions would give a consistent understanding of the sort of assets we seek to handle.”

The submission of comments must be completed before the 11th of October.

US policymakers are making significant progress toward their goal of regulating the cryptocurrency market. While the Commodity Futures Trading Commission (CFTC) is boosting its industry regulation, the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, has frequently urged crypto businesses to talk to the agency.

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