SEC pushes forward major reforms: "Innovative Exemption" for digital assets on the horizon, private offering disclosures may be relaxed.

The U.S. securities regulatory policy may be undergoing a major adjustment. The U.S. Securities and Exchange Commission (SEC) has recently submitted two important draft rules to the White House for review, involving digital asset regulation and disclosure requirements for hedge funds and private equity firms. According to information disclosed on the U.S. government website, these two proposals were submitted to the White House Office of Management and Budget (OMB) for review on March 20 and officially announced on Monday. It is widely believed within the industry that this process marks a further step towards the implementation of related policies. Regarding digital assets, SEC Chairman Gensler had previously previewed the new rules. According to his statement, the proposal will introduce the highly anticipated "innovation exemption," allowing certain digital asset firms to be exempt from being classified as brokers, exchanges, or other regulated entities for a certain period of time, reducing compliance thresholds and encouraging industry innovation and development. Market participants believe that this move signifies a further shift in SEC's stance on digital asset regulation, transitioning from an emphasis on strict regulation to controlling risks while giving the industry room to grow, which may be seen as a major benefit to the crypto industry. Meanwhile, another proposal focuses on the information disclosure system in the private market, which could bring significant adjustments to the current Form PF reporting system. Form PF is an important tool for hedge funds, private equity funds, and other institutions to disclose performance and risk data to regulatory authorities. Gensler had previously requested SEC staff to study the feasibility of simplifying disclosure requirements, believing that the current system imposes a "heavy burden" on investment management firms and that the government's use of the relevant data may not necessarily justify such high compliance costs. It is worth noting that SEC has postponed the implementation of the new round of Form PF disclosure rules, previously promoted by former Chairman Clayton, to October 1. The rule originally required funds to report more detailed information, including significant additional margin notices and counterparty risk exposures, which were introduced following the Archegos' collapse in 2021.