Update: On May 9, 2022, the SEC announced it was reopening the comment period on the proposed rule. The reopened comment period will close on June 13, 2022 (based on the reopening release's May 12, 2022 publication in the Federal Register).

On January 26, 2022, the SEC issued a proposed rule to:

The proposed rule builds upon a 2020 proposal to extend Regulations ATS and SCI to cover US government securities markets (see Legal Update, SEC Proposes to Expand Regulations ATS and SCI to Cover Government Securities Markets), with certain changes and additional proposed amendments based on public comment. The proposed rule is intended to enhance investor protections and cybersecurity for ATSs that trade US treasuries and other government securities.

Although the proposal does not specifically reference cryptocurrency or blockchain, it mentions "communication protocol systems," which could potentially apply to trading venues of all types, including unregulated crypto platforms. SEC Commissioner Hester Peirce issued a statement of dissent arguing that the proposal is too wide-ranging and that the public comment period was too short for the enormity of the proposal.

The comment period for the proposed rule will be open for 30 days after publication in the Federal Register.

For up-to-date information on SEC rulemaking, see Practice Note, SEC Rulemaking Tracker.