BitOoda Regulatory Analysis, 3/16/2020: Regulators’ Reactions to Coronavirus Show a Welcome, Pragmatic Approach
As we all grapple with the ongoing effects of the Coronavirus outbreak, and many of us continue to implement contingency and mitigation plans focused on our firms’ most critical operations and our employees’ safety, we wanted to offer our thanks to the work that financial regulators are doing to ensure the maintenance of functional and orderly market activity while taking a pragmatic approach to compliance during this crisis.
Both the SEC and CFTC (and their respective SROs) have issued a series of reassuring and welcome communications in the past two weeks regarding their approaches to regulatory requirements at this time. The communications have reflected some of the specific challenges regulated firms are facing and conveyed the agencies’ intentions to take a practical approach when it comes to meeting certain requirements.
· For example, NFA noted that it is aware some representatives may be unable to work at a firm’s designated office or backup locations, but that NFA and CFTC will offer “appropriate flexibility in implementing contingency plans needed to continue to conduct business.” A week later, NFA further clarified its intent not to pursue disciplinary action against firms that permit its staff to work temporarily from locations not listed as branch offices. Both notices also contained specific recommendations on how firms should approach their contingency plans, and laid out expectations for firms’ eventual return to normal operations.
· The SEC announced that it was providing conditional regulatory relief and assistance for requirements including certain filing deadlines (e.g., if companies are unable to obtain needed signatures), issued guidance in the event of an inability to hold in-person board meetings, and allowed the use of virtual meetings to promote continued shareholder engagement.
· In addition to federal regulators, NY’s Department of Financial Services issued a letter to virtual currency licensees requesting information on each firm’s preparedness plans to address the operational and financial risks posed by the outbreak.
As a firm founded on a bedrock of compliance, we at BitOoda appreciate the clear and timely guidance from these regulators, the reassuring tone of their communications, and their reasonable approach to meeting a range of requirements possibly hindered by the crisis. While we realize that of course these messages and notices have not been specific to digital assets, we applaud regulators’ efforts to remain in contact with their stakeholders and to prioritize appropriately among employee safety, investor protections, and market integrity. We thank them for their service during these difficult times and look forward to continuing to work with them to mitigate the impact of this crisis.