The U.S. Securities & Exchange Commission’s Division of Trading and Markets published FAQs on trading and settlement issues for national securities exchanges and alternative trading systems facilitating crypto asset activity, including “pairs trading” where one leg is a crypto asset security and the other is a non-security crypto asset. In a related statement, Commissioner Hester M. Peirce positioned the FAQs as staff guidance for regulated platforms and set out a request for information to support the SEC Crypto Task Force’s work on potential market structure changes. The questions focus on how Regulation NMS and Regulation ATS affect crypto-focused platforms, including when a crypto ATS affiliated with an exchange should be treated as an exchange facility and whether amendments to national market system plans are needed to support security and non-security crypto pairs trading on exchanges. The statement also explores possible changes to disclosures, reporting, and oversight, including a crypto-tailored Form ATS, whether Form ATS should remain non-public and not subject to Commission approval for crypto ATSs, and whether disclosures (including conflicts) should be public or subject to a Commission review and effectiveness process. Other issues raised include Form ATS-R reporting for crypto ATSs, recordkeeping and the use of blockchain-based records, methodologies for converting non-USD assets to USD for Regulation ATS compliance, safeguards for confidential subscriber trading information, the applicability of Form ATS-N and certain order display and access obligations for ATSs trading NMS stock crypto asset securities, and whether Rule 15c3-5 and Regulation SCI should be amended, repealed, or clarified for crypto ATSs.

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