Member News

FINRA Convenes U.S. Regulators to Discuss Distributed-Ledger Technology

By Susan Gault-Brown and John Sullivan

The Financial Industry Regulatory Authority (FINRA) sponsored a symposium in July 2017 at which U.S. regulators discussed the use of distributed-ledger technology (also referred to as blockchain) in the financial services industry and the regulatory significance of blockchain.

The U.S. regulators in attendance included FINRA, the Securities and Exchange Commission, the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency, and the Federal Reserve Board. Prior to the symposium, FINRA published a report on the implications of blockchain on the securities industry.

The symposium included descriptions of each regulator’s internal blockchain working group. These working groups are designed to facilitate a better internal understanding of blockchain, to coordinate with industry participants to determine how blockchain can best be used, and to understand the regulatory obligations resulting from such use.1 Symposium participants also discussed the benefits of blockchain to the financial markets, highlighting such advantages as more efficient payment, clearing, and settlement cycles and a decrease in administrative, back office costs. They concluded, however, that notwithstanding the transformative benefits of blockchain, regulatory considerations must be addressed before the industry can fully embrace the technology.

For more information about the legal effects of blockchain or any other fintech regulatory matter, please contact Robert Rosenblum, Susan Gault-Brown, or any member of the firm’s fintech regulatory practice.

Compliments of  WSGR, an EACCNY member company