Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds.
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SEC Seeks Feedback on "Foreign Private Issuer" Definition and Accommodations
By Alyse Sagalchik, Mark Wood, Timothy Kirby, Richard Marshall
On June 4, the Securities and Exchange Commission (SEC) issued a concept release, soliciting public comment on the definition of "foreign private issuer." For an issuer that is already an SEC reporting company, its status as a foreign private issuer is remeasured annually as of the last day of the issuer's second fiscal quarter — meaning that, for issuers with calendar year fiscal years, their annual remeasurement date is June 30. As noted in the concept release, issuers that qualify as foreign private issuers are eligible to take advantage of certain significant exemptions and accommodations with respect to SEC disclosure and filing requirements. Read Katten's advisory.
SEC Form PF Amendments Delayed Again
By Adam Bolter
The SEC voted to extend the compliance date for rule amendments that expand the reporting requirements for private fund managers. The Form PF amendments were adopted on February 8, 2024 (discussed here), with an original compliance date of March 12, 2025, then extended to June 12, 2025, and now will be extended to October 1, 2025 (provided the Commodity Futures Trading Commission (CFTC) similarly approves the extension). Read about Form PF amendments.
SEC Seeks to Wipe the Slate Clean with Sweeping Withdrawal of 14 Proposed Rulemakings
On June 12, the SEC withdrew 14 proposed rules, noting that if the SEC decides in the future to address such topics, it will do so by publishing new proposals, subject to notice and comment requirements under the Administrative Procedure Act. A list of the proposed rules withdrawn is available here. Stay tuned for a Katten Client Advisory that discusses these proposed rule withdrawals in more detail, in addition to recent shifts in priorities and policies that we have seen in the first half of 2025.
SEC Staff Green Lights Various Staking Activities
By Daniel Davis, Alexander Kim
The SEC's Division of Corporation Finance released a statement articulating its position that certain cryptocurrency staking activities fall outside the federal securities laws. This development coincides with the House of Representatives introducing the Digital Asset Market Clarity Act, a comprehensive market structure bill for digital assets, signaling continued momentum toward regulatory clarity in the digital assets sector. Read about the three staking models.
On the Hot Seat: Brian Quintenz Faces Senate Spotlight in CFTC Confirmation Hearing
By Nicholas Gervasi, Carl Kennedy, Daniel Davis, Matt Kluchenek, Alexander Kim
Brian Quintenz appeared before the Senate Committee on Agriculture, Nutrition, & Forestry (Senate Ag Committee) for his June 10 nomination hearing for Commodity Futures Trading Commission (CFTC) Chairman. Committee members questioned Mr. Quintenz on a range of topics, including the regulation of digital assets, event contracts and prediction markets, the CFTC’s approach to innovation and technology, and resource allocation. Largely reaffirming the principles that guided his prior tenure as a commissioner, Mr. Quintenz emphasized his commitment to promoting responsible innovation while protecting investors, supporting a technology-forward approach to all aspects of the Commission's functions, and preserving the CFTC’s role as a principles-based regulator. Read about Mr. Quintenz's nomination hearing.
Daniel Davis and Carl Kennedy Share Thoughts on Solo CFTC Commissioner
Partners and Financial Markets and Regulation Co-Chairs Dan Davis and Carl Kennedy shared their thoughts, respectively, with Politico and Bloomberg Law on the prospects of the CFTC regulating with a lone commissioner. Dan stated, "All signs point to a lone commissioner being able to legally act on behalf of the commission even if they are its only members." Carl noted, "By year-end, he will have a lot on his plate and will be the only commissioner tasked with having to address full agency action." Read about Dan’s comments. Read about Carl's comments.
Can There be Only One? The CFTC Faces an Unprecedented Moment with Potentially One Commissioner
By Carl Kennedy, Daniel Davis, Nicholas Gervasi
As commissioners continue to depart, the CFTC may soon find itself in an unprecedented situation - operating with only one sitting commissioner. While the CFTC has weathered periods with as few as two commissioners, a one-member Commission would mark uncharted territory. Yet, under the Commodity Exchange Act (CEA), the CFTC may continue to function and make decisions, even with a single member. Read about how the CFTC could continue regulations with one commissioner.
Stay on Alert: CFTC Staff Reminds Registered Exchanges and Clearinghouses to Evaluate and Calibrate Their Volatility Control Mechanisms
By Carl Kennedy, Eli Krasnow
The CFTC's Division of Market Oversight and Division of Clearing and Risk issued an advisory reminding designated contract markets (DCMs) and derivatives clearing organizations (DCOs) of their regulatory obligations under the CEA and CFTC regulations to implement and consistently evaluate the efficacy of their controls designed to address market volatility. These controls — referred to as volatility control mechanisms (VCMs) by the Committee on Payments and Market Infrastructure and the International Organization of Securities Commissions — are especially important in today's environment, where global events such as pandemics, wars, sanctions, political instability, and abrupt policy changes can drive extreme volatility. Read about the staff advisory.
Regulatory Clarity and Practical Challenges: Unpacking CFTC Letters 25-09 and 25-10
By Carl Kennedy, Alexander Kim
Derivatives market participants continue to process the implications of two significant interpretive letters issued by the CFTC staff earlier this year. Letter 25-09 effectively eliminates the pre-trade mid-market mark (PTMMM) disclosure requirement for swap dealers, while Letter 25-10 concludes that Window FX Forwards should be classified as "foreign exchange forwards," and that package foreign exchange transactions should not be considered swaps. Read about considerations for swap deals.
Senate Passes GENIUS Act: Landmark Federal Stablecoin Bill Advances to House
By Daniel Davis, Christina Grigorian, Alexander Kim
The US Senate has passed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) by a vote of 68-30, a significant development for cryptocurrency regulation in the United States. This passage follows the recent advancement of the Digital Asset Market Clarity (CLARITY) Act, a crypto market structure bill, through the House Financial Services and Agriculture committees and toward a full House vote, demonstrating growing bipartisan momentum for comprehensive crypto regulation. Read about the GENIUS Act.
SEC Requests Stay of CAT-Related Class Action Proceedings
By James Brady, Michael Lohnes, Nicholas Gervasi
On June 11, the SEC requested a stay of proceedings in a pending class action lawsuit challenging the SEC’s implementation of the Consolidated Audit Trail (CAT). The SEC's rationale for the request was that it is considering potential changes to CAT that may render the class action moot. Read about CAT-related proceedings.
SEC Signals Reevaluation of CAT Reporting Amid Broader Transparency and Regulatory Reform Efforts
By James Brady, Michael Lohnes, Nicholas Gervasi
SEC Chairman Paul S. Atkins recently directed SEC staff to conduct a review of the CAT, focusing on the escalating costs, reporting requirements, and cybersecurity risks stemming from sensitive data collection. This directive aligns with Chairman Atkins' expressed priorities to return to principled regulation, support market innovation and evolution, and reduce unnecessary compliance burdens. Among other things, Chairman Atkins cited CAT's "appetite for data and computing power," noting annual costs approaching $250 million, ultimately borne by investors, as the rationale for this reevaluation. He supported Commissioner Mark T. Uyeda's efforts behind the granting of an exemption from the requirement to report certain personally identifiable information (PII) to CAT for natural persons. Read about CAT reform efforts.
Think Compliance Got Easier? Think Again—DOJ's New Era in White-Collar Enforcement (Part 2)
By Ryan Meyer, Johnjerica Hodge, Taylor Stilwell
Matthew R. Galeotti, the Head of the Department of Justice's Criminal Division, issued a memorandum on May 12 that highlights the core tenets of the Department's enforcement of corporate and white-collar matters under the Trump Administration — focus, fairness, and efficiency. This second post in our series explores the "Fairness" tenet. Under the fairness prong, Galeotti underscores that "justice demands the equal and fair application of criminal laws to individuals and corporations who commit crimes." Read about the second tenet.
The first post, included in the May edition of Financial Markets and Funds Quick Take, covered "Focus." Read about the first tenet.
Think Compliance Got Easier? Think Again—DOJ’s New Era in White-Collar Enforcement (Part 3)
By Ryan Meyer, Johnjerica Hodge, Taylor Stilwell
Delving into the memorandum issued by the Head of the Department of Justice's (Department) Criminal Division, Matthew R. Galeotti— "Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime," this post explores the final tenet — Efficiency. As Galeotti explains, the Efficiency tenet aims to maximize the Efficiency of Department investigations in order to minimize costs and intrusiveness and prevent unwarranted reputational damage to businesses. The Galeotti Memorandum identifies two main areas for improvement: the investigative process and the use of corporate monitors. Read about the third tenet.
EU/UK
FCA Consults on Proposals for Stablecoin Issuance and Cryptoasset Custody
By Carolyn Jackson, Nathaniel Lalone, Neil Robson, Christopher Collins, Ciara McBrien, Sara Portillo
The UK Financial Conduct Authority (FCA) recently published two consultations: CP25/14 on stablecoin issuance and cryptoasset custody (CP25/14), and CP25/15 on prudential requirements for cryptoasset firms (CP25/15, and together with CP25/14, the Consultations). The Consultations are the latest milestone in the FCA's roadmap for cryptoasset regulation. They build on HM Treasury's draft legislation published in April 2025, which will bring certain cryptoasset-related activities within the UK regulatory perimeter. Read about FCA stablecoins and cryptoasset consultations.
ICYMI
Here's a look back at a recent client advisory from Katten.
- "Confirming a Negative: CFTC Staff Issue an Advisory Clarifying When Foreign-Organized Entities Are Trading and Brokering Digital Asset Derivatives Outside of the Commission’s Cross-Border Jurisdiction," June 9, 2025
- "SEC Expands the Ability of Registered Closed-End Funds to Invest in Private Funds," May 29, 2025
Partners Wendy Cohen (vCard), Stephen Morris (vCard) and Jonah Roth (vCard) serve as co-editors of Katten Financial Markets and Funds Quick Take.
