On March 5th, I had the honor of representing the Maryland Blockchain Association on Capitol Hill for the U.S. House Capital Markets Subcommittee hearing: “The Role of Self-Regulatory Organizations in U.S. Markets.”
Chaired by Rep. Ann Wagner, the session was a deep dive into the “Restoring Accountability in Market Supervision Act,” which considers transferring FINRA’s rulemaking and enforcement authority directly to the SEC. The discussion centered on several critical pillars of regulatory reform:
- Accountability & Transparency: Legislators questioned why SROs like FINRA, which exercise government-level power to levy fines and end careers, are not subject to the same transparency laws (like FOIA) as federal agencies.
- Due Process: Witness Valerie Mirko highlighted the “irreversible harm” caused when FINRA bars individuals from the industry immediately, often before the SEC has a chance to review the case.
- Operational Efficiency: Mike Lawler and other members noted that the SRO framework created in 1934 is outdated for today’s high-speed, automated markets and may be creating unnecessary duplication and costs for smaller firms.
- Investor Protection: Jennifer Shaw (PIABA) raised concerns about the fairness of the industry-run arbitration system, emphasizing that reform must prioritize “Main Street” investors.
A highlight of the day was connecting with Rep. Ann Wagner and Rep. Mike Lawler to discuss how regulatory clarity—or the lack thereof—impacts innovation and the long-term health of our capital markets. As we navigate this “Regulatory Renaissance,” ensuring that our oversight bodies are fit for the digital age remains a top priority for the MDBA.
#FINRA #MSRB #SEC #CapitalMarkets #RegulatoryReform #MDBA #DigitalAssets
Watch the full House Subcommittee Hearing on SRO Reform
This video provides the full recording of the March 5th hearing, allowing you to hear the specific testimonies from the legal experts and the direct questioning from the Subcommittee members regarding FINRA and MSRB reform.
Dr. Sylvester, CCIA, CCI, CCIE, CIPM ll, FIIM., Co-Chair African Modernization Task Force – Digital Asset Regulatory Authority (www.dara.foundation), a grassroots SRO initiative.
