The United States Securities and Exchange Commission (SEC) is not yet ratified the definition of digital assets in rules that govern reporting disclosures for hedge and private equity funds.
The ratification was initially proposed as the SEC-modified Form PF. However, the regulatory body has announced that it will not be adding the definition, at least not immediately.
Initially, the SEC planned to include a definition of digital assets in a proposal for the modifications submitted in August 2022. If it had been law, it would have been the first time the Securities and Exchange Commission (SEC) defined “digital assets.”
The Securities and Exchange Commission (SEC) proposed the definition of digital assets as an asset “that is utilized in transfers using a distributed ledger or blockchain technology.” This definition also includes other regularly used terminology, such as virtual currencies, coins, and tokens.
The SEC additionally said in its proposal from August that information on a fund’s digital assets is disclosed under an “other” category at present, which results in “less robust Form PF data for analysis.”
It suggested the term to achieve distinct and, thus, more accurate reporting on such assets, and its motivation for doing so was stated above.
“In order to better understand the overall market exposures that funds face, we believe it is important to collect information on the exposures that funds have to digital assets.”
SEC’s proposal
In contrast, the most recent revisions to the regulations governing the SEC’s Form PF now mandate, amongst other additional requirements, that SEC-registered funds disclose the occurrence of significant events that might signal systemic risk or damage to investors. This is likely a reaction to the financial crisis in the United States.
Source: https://crypto.news/us-sec-delays-ratification-of-digital-assets-definition/