Lengthy Process Ahead for FIT21 Bill Implementation, Predicts CFTC Commissioner
Summary:
The implementation of the Financial Innovation and Technology for the 21st Century Act (FIT21) could take months or years, warns Commissioner Summer Mersinger of the Commodity Futures Trading Commission (CFTC). Once a bill becomes law, regulatory bodies like the SEC and CFTC must create and enforce new rules, a process that requires drafting regulations, a public comment period, and potential revisions based on feedback. This intricate process could extend from several months to years. The FIT21 bill, aimed at defining the responsibilities between the SEC and CFTC regarding digital assets, is currently looking towards Senate approval after clearing the House of Representatives.
The process to put into operation the Financial Innovation and Technology for the 21st Century Act (FIT21) could undergo an extended phase of execution, potentially demanding prolonged periods for the effective collaboration of regulators in the United States, extending from months to years. Summer Mersinger, the Commissioner with the Commodity Futures Trading Commission (CFTC), cast this prospect during a discussion panel at the 2024 Consensus conference. Mersinger anticipates a delayed regulatory execution of the bill if it is converted into law.
Describing legislation as a prolonged operation, Mersinger stated that the rulemaking is also equally time-consuming. She added that only the completion of legislation is considered phase one. The lengthy procedure depends on how the legislation is passed by Congress. Subsequent to the legislation getting signed into law, it could still require considerable time for the rules to come into play.
Once a bill is approved as a law, regulatory organizations like the Securities and Exchange Commission (SEC) and the CFTC are charged with the responsibility to impose the new rules. This encompasses drafting intricate regulations, opening a period for public comments, and potential additional revisions based on the feedback garnered. This stage might stretch over several months, if not years, similar to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law back in 2010.
The FIT21 bill has already successfully bypassed the House of Representatives with support from both parties and is currently ready to face the hurdles in the Senate. The legislation aims to clarify the regulatory duties between the SEC and CFTC concerning digital assets. Despite not explicitly deciding on a veto, the administration of Joe Biden has shared its apprehensions about the bill, indicating at potential regulatory loopholes that could impact the stability of the market.
Sharing her thoughts during the event, SEC Commissioner Hester Pierce voiced how Congress’ interest in crypto legislation is a reaction to the SEC's enforcement process towards crypto firms, arguing that Congress tired of watching an unclarified approach by the SEC. Commending this interest from Congress, Pierce further mentioned that the SEC has fallen short at utilizing the flexibility granted to them by Congress in terms of legislating around "how the law should apply to challenging, new things.”
Published At
5/30/2024 10:50:00 PM
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