Fidelity Investments has submitted a formal letter to the US Securities and Exchange Commission (SEC) urging the regulator to develop a comprehensive framework governing how broker-dealers offer, custody, and trade crypto assets on alternative trading systems (ATS). The letter, sent on Friday, was a direct response to a call for public comments issued earlier this month by the regulator’s Crypto Task Force. The asset manager, one of the largest in the United States, described such a framework as “critical” for the industry’s development.
Central to Fidelity’s recommendations is the need for clear rules around tokenized securities trading, including instruments issued by third parties. The company noted that tokenized instruments carry distinct issuance structures, legal considerations, and valuation models that set them apart from traditional assets. Tokenized real-world assets (RWAs), for instance, span a wide range of asset classes including equities, real estate, bonds, and private credit.
Fidelity emphasized that tokenization models differ considerably in structure and in the rights they extend to holders. Because of this variation, the company argued that a one-size-fits-all approach would be inadequate for regulating the space. The letter called on the SEC to account for these structural differences when crafting new rules.
The firm also urged the SEC to address the regulatory gap between centralized and decentralized trading venues. Fidelity’s general counsel, Roberto Braceras, wrote that the regulator should consider how intermediated and disintermediated trading platforms can evolve and coexist within the same regulatory environment. This includes revisiting existing reporting requirements that decentralized finance (DeFi) platforms and other disintermediated systems are structurally unable to meet, given the absence of a central authority to produce detailed financial disclosures.
Fidelity further recommended that the SEC issue guidance explicitly permitting broker-dealers to use distributed ledger technology for ATS operations and recordkeeping purposes. Updating reporting obligations to reflect this technological reality would, according to the letter, remove undue burden from decentralized systems. The company framed these changes as necessary steps toward a functioning and fair digital asset marketplace.
The SEC, under the leadership of Chairman Paul Atkins, has signaled growing openness to innovation in capital markets, including support for around-the-clock trading and regulatory space for firms to experiment with tokenized trading. This broader posture aligns with the direction Fidelity is advocating in its submission. The regulator has previously granted approvals allowing financial companies to explore tokenized trading structures.
Tokenized securities, which can include equities, debt instruments, real estate investment trusts (REITs), and other securitized assets, remain subject to the same banking capital requirements as the underlying assets they represent. This position was affirmed in a joint policy statement published in March by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC). The agencies stated that the technology used to issue or transact in a security does not generally affect how it is treated for capital purposes.
Originally reported by CoinTelegraph.
