Quantum Updates 56 | September 2025

ASIC Seeks High Court Appeal on Block Earner Crypto Financial Product Ruling

On 21 May 2025, the Australian Securities and Investments Commission (ASIC) announced that it will seek special leave from the High Court of Australia to appeal the decision of the Full Court of the Federal Court of Australia in the Block Earner case. The Full Court had ruled that a fixed-yield crypto lending product offered by Block Earner did not constitute a “financial product” under the Australian Corporations Act 2001 (Cth). ASIC stated that clarification is required on the statutory scope of “financial product,” emphasising that the definition was drafted to be broad and technology-neutral. The regulator maintains that certainty from the High Court is necessary in the public interest, particularly for determining the regulatory perimeter of interest-earning and asset-conversion products. The High Court of Australia will consider ASIC’s application on a date to be fixed.

• The Federal Court of Australia on 9 February 2024 found that Block Earner engaged in unlicensed financial services conduct between March and November 2022 by offering its “Earner” product.
• On 4 June 2024, the Federal Court relieved Block Earner from liability to pay a penalty in relation to the Earner product.
• ASIC filed an appeal on 18 June 2024 against the penalty relief ruling, while Block Earner cross-appealed on 9 July 2024, contesting the finding that a licence was required.
• The Full Court of the Federal Court of Australia heard both the appeal and cross-appeal on 6 March 2025.
• On 22 April 2025, the Full Court allowed Block Earner’s cross-appeal, finding the Earner product was not a financial product, and dismissed ASIC’s appeal.
• On 21 May 2025, ASIC confirmed it will seek special leave from the High Court of Australia to challenge the Full Court’s ruling.
• The Corporations Act 2001 (Cth) definition of “financial product” is central to the dispute, with ASIC arguing it should extend to fixed-yield crypto lending and asset-conversion products.
• If the High Court grants leave and rules in favour of ASIC, the scope of Australian financial services law could expand to capture a wider range of crypto-linked products.
• If the Full Court’s reasoning is upheld, providers of fixed-yield crypto products may argue their offerings do not fall within the financial product perimeter, provided they avoid investment facility characteristics.
• The matter will shape compliance strategies for crypto exchanges and issuers in Australia and signals how courts interpret technological neutrality against investor protection in financial product regulation.

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ASIC Chair Joe Longo Outlines AI Blueprint for Banking at ABA Conference

On 23 July 2025, the Australian Securities and Investments Commission (ASIC) Chair Joe Longo delivered a speech at the Australian Banking Association (ABA) Banking Conference in Sydney titled “AI: A blueprint for better banking?”. The address examined how artificial intelligence could reshape the Australian banking sector. Longo confirmed that ASIC will not obstruct responsible AI adoption, but warned that “cutting-edge technology cannot leave your customers bleeding.” While ASIC does not intend to propose immediate AI-specific rules, the regulator emphasised that obligations under the Australian Corporations Act 2001 (Cth) already apply to directors and licensees deploying AI. Longo underlined that banks have a unique opportunity to rebuild consumer trust in AI by demonstrating ethical and customer-focused innovation, with ASIC ready to use existing enforcement powers where AI misuse harms customers.

• The Australian Securities and Investments Commission reiterated that Australia’s technology-neutral framework under the Corporations Act 2001 (Cth) already imposes obligations on directors and financial services providers using AI.
• Joe Longo stressed that creating fragmented, overly prescriptive AI regulations could increase compliance burdens, favouring principle-based enforcement instead.
• ASIC’s enforcement strategy will be “bolder and more imaginative,” relying on existing powers to act against misconduct involving AI deployment.
• Consumer trust in AI remains low, with surveys showing that although half of Australians use AI, only 36% report trust in the technology.
• Banks, with extensive data capabilities and customer engagement, are well positioned to rebuild confidence by showing AI’s practical benefits.
• Westpac is trialling AI to strengthen fraud detection, NAB is using AI to detect systemic customer complaint issues, and CBA is piloting AI bots to counter scam calls.
• ASIC’s Report 798 Beware the Gap identified governance shortcomings among licensees deploying AI, signalling enforcement risk if oversight is inadequate.
• ASIC’s Report 785 Better Banking for Indigenous Consumers revealed systemic harms in fee practices, with millions refunded — highlighting how AI could be used proactively to prevent misconduct.
• Directors’ duties under the Corporations Act 2001 (Cth) extend to AI oversight, requiring boards to ensure AI aligns with fiduciary and statutory responsibilities.
• ASIC confirmed that customer-centric innovation in AI will be welcomed, but irresponsible or harmful deployment will attract enforcement, consistent with global regulatory trends favouring principle-based approaches.

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ASIC Appeal in Finder Wallet Case Dismissed by Full Court of the Federal Court of Australia, Clarifies: Crypto Staking Activities not a Debenture

On 24 July 2025, the Full Court of the Federal Court of Australia dismissed the appeal filed by the Australian Securities and Investments Commission (ASIC) in Australian Securities and Investments Commission v Wallet Ventures Pty Ltd (formerly Finder Wallet Pty Ltd) [2025] FCAFC 93. ASIC had argued that the Finder Earn product was a debenture under the Australian Corporations Act 2001 (Cth), requiring compliance with licensing and disclosure obligations. The Full Court upheld the earlier Federal Court decision, confirming that Finder Earn was not a debenture and that Wallet Ventures Pty Ltd had not breached the Corporations Act. The ruling highlights the difficulty of applying traditional statutory debt definitions to emerging crypto yield products and points to gaps in Australia’s financial services regulatory framework.

• The Full Court of the Federal Court of Australia held that Finder Earn did not involve money deposited with or lent to Wallet Ventures Pty Ltd, and therefore lacked the defining features of a debenture.
• The Australian Securities and Investments Commission had argued that the fixed-yield structure fell within the statutory definition of a debenture, but the Court rejected this interpretation.
• The Australian Corporations Act 2001 (Cth) requires a debenture to include an undertaking to repay money as a debt, which was absent in this case.
• The Federal Court of Australia confirmed that Wallet Ventures Pty Ltd was not engaged in unlicensed financial services or in breach of disclosure obligations.
• The judgment demonstrates judicial reluctance to stretch the legislative definition of debt instruments to cover novel crypto yield and staking models.
• The Australian Securities and Investments Commission has noted that other crypto offerings may still fall within regulated financial product categories under Information Sheet 225, requiring an Australian Financial Services licence.
• The decision provides certainty to an extent to issuers of yield-bearing crypto products but also exposes a gap in the Australian Corporations Act 2001 (Cth) that may lead to legislative reform and forthcoming amendment in this regard is anticipated in coming future.

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ASIC Investor Alert: Unlicensed Crypto Futures Offered by Bitget Breach Australian Financial Services Laws

On 28 July 2025, the Australian Securities and Investments Commission (ASIC) issued an investor warning against Bitget and its related entity BTG Technology Holdings Limited. ASIC confirmed that Bitget is offering crypto asset futures products to Australian investors without holding an Australian Financial Services (AFS) licence under the Australian Corporations Act 2001 (Cth). The regulator stressed that investors using these unlicensed products lose access to statutory protections, including dispute resolution mechanisms and client money safeguards. Bitget markets the products as “crypto futures trading” through its website and mobile application, accessible in Australia. ASIC highlighted that the products involve leverage of up to 125:1, in stark contrast to the 2:1 cap permitted under Australian law for retail clients. The regulator warned that unlicensed and over-leveraged derivative products expose investors to substantial risks and potential losses.

• The Australian Securities and Investments Commission confirmed that Bitget does not hold an Australian Financial Services Licence and is not authorised to market futures trading products in Australia.
• The Corporations Act 2001 (Cth) requires licensing for entities offering derivative products to Australian residents, including crypto futures.
• Investors trading with Bitget are not protected by statutory rights such as internal dispute resolution or client asset safeguards under Australian financial services law.
• Bitget advertises futures contracts with leverage up to 125:1, compared to the 2:1 leverage limit imposed on retail crypto asset derivatives in Australia.
• High leverage means one dollar of margin can generate $125 in notional exposure, amplifying both profits and losses.
• ASIC warned that such leverage dramatically increases the likelihood of severe financial losses for retail investors.
• The regulator noted that its concerns align with international warnings issued against Bitget since 2022 by regulators in Spain, Austria, Germany, Canada, France, Cyprus, Malaysia, and Japan.
• The Japanese Financial Services Agency most recently listed BTG Technology Holdings Limited in June 2025 as an unlicensed operator soliciting crypto derivatives without registration.

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Hong Kong Monetary Authority Issues Guidance on Crypto Staking from Custodial Services

On 7 April 2025, the Hong Kong Monetary Authority (HKMA) issued a circular titled “Provision of Staking Services for Virtual Assets from Custodial Services” to all authorised institutions. The guidance establishes regulatory standards for institutions wishing to provide crypto staking as part of their custodial services. Under the framework, crypto staking is defined as the commitment of client virtual assets to proof-of-stake blockchain protocols to support transaction validation, with rewards returned to clients. The HKMA confirmed that authorised institutions must implement strong governance, internal controls, and transparent disclosures before engaging in such activities. Subsidiaries of locally incorporated authorised institutions are also captured within the scope. Discussions with the HKMA are expected before launching any staking operations, signalling close supervisory oversight.

• The Hong Kong Monetary Authority confirmed that the guidance applies to authorised institutions and subsidiaries providing staking services from custodial operations, requiring full compliance with the standards.
• Institutions must maintain possession or control over withdrawal mechanisms for staked assets, including private keys and voluntary exit messages, to protect client holdings.
• Comprehensive internal policies are required to prevent misconduct, manage conflicts of interest, mitigate risks, and ensure continuity of custody operations.
• Disclosure obligations require institutions to inform clients of eligible virtual assets, involvement of third-party providers, fee structures, lock-up periods, payout schedules, and resumption plans.
• The HKMA emphasised that material risks must be clearly disclosed, including validator inactivity, slashing, hacking, technical bugs, and legal uncertainties on ownership rights.
• Protocol selection must follow due diligence, with authorised institutions demonstrating skill and care when choosing proof-of-stake blockchain networks.
• Where outsourcing occurs, institutions must oversee third-party providers through continuous monitoring, including reviews of their validation history, security controls, and resilience frameworks.
• Authorised institutions must implement adequate systems and compliance frameworks before commencing staking activities, consistent with HKMA supervisory expectations.
• The HKMA encouraged institutions to test staking models through its Supervisory Incubator for Distributed Ledger Technology, launched in January 2025, as part of innovation oversight.
• The circular reinforces Hong Kong’s regulatory focus on balancing innovation with investor protection, embedding client asset safeguards into the provision of staking services.

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Hong Kong SFC Circular on Custody of Virtual Assets for Licensed Trading Platform Operators

On 15 August 2025, the Hong Kong Securities and Futures Commission (HK SFC) issued its Circular to Licensed Virtual Asset Trading Platform Operators on Custody of Virtual Assets under the Hong Kong Securities and Futures Ordinance (Cap. 571). The circular introduces mandatory minimum custody standards for all licensed virtual asset trading platforms (VATPs), reinforcing client asset protection in response to overseas custody failures. The requirements form part of Initiative 3 of Pillar “Safeguard” in the HK SFC’s ASPIRe Roadmap and are designed to strengthen cold wallet governance, transaction verification, and round-the-clock monitoring. The standards will later extend to virtual asset custodian service providers once the legislative framework under the joint consultation by the Financial Services and the Treasury Bureau (FSTB) and the HK SFC is finalised. The measures confirm Hong Kong’s move towards a comprehensive statutory regime for safeguarding client virtual assets.

• The Hong Kong Securities and Futures Commission requires each licensed VATP to appoint a Responsible Officer or Manager-in-Charge to oversee custody and ensure compliance with the Guidelines for Virtual Asset Trading Platform Operators.
• Cold wallet infrastructure must be built on offline key generation, certified hardware security modules, and secure backups, avoiding reliance on public blockchain smart contracts.
• Withdrawal addresses must be whitelisted, with multiple independent verification checks enforced, while signing devices must remain air-gapped, isolated, and dedicated solely to custody.
• The Hong Kong Securities and Futures Commission mandates strict due diligence for third-party wallet providers, including independent code reviews, supply chain controls, segregation of duties, and continuous audit and recovery testing.
• Licensed platforms must operate a Security Operations Centre or equivalent function with 24/7 monitoring, ensuring on-chain assets reconcile in real time with internal ledgers.
• Immediate escalation to senior management is required upon detection of anomalies, with monitoring covering blockchain protocols, encryption systems, and vendor infrastructure.
• The Management, Supervision and Internal Control Guidelines oblige VATPs to provide continuous staff training, including phishing simulations and transaction validation, to mitigate insider risks.
• The custody framework aligns with the July 2025 public consultation on statutory licensing of virtual asset custodians under the Securities and Futures Ordinance (Cap. 571) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).
• These custody standards set immediate obligations for licensed VATPs for compliance of statutory regime governing virtual asset custodians in Hong Kong.

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Singapore MAS and Brunei BDCB Strengthen Cross-Border Financial Cooperation with MoU on Collateral Framework

On 14 August 2025, the Monetary Authority of Singapore (MAS) and the Brunei Darussalam Central Bank (BDCB) announced enhanced cooperation at the fifth BDCB–MAS Bilateral Roundtable in Brunei Darussalam. Both regulators signed a Memorandum of Understanding (MoU) establishing a reciprocal cross-border collateral arrangement, allowing financial institutions to access a wider pool of eligible collateral in each jurisdiction. The framework provides greater flexibility for liquidity provisioning, strengthens regional financial resilience, and underscores the importance of cross-border monetary cooperation. The meeting also reaffirmed MAS’s and BDCB’s commitment to commemorate the 60th Anniversary of the Currency Interchangeability Agreement in 2027. The roundtable highlighted the two central banks’ long-standing partnership in promoting financial stability, payments connectivity, and coordinated responses to regional and global economic developments.

• The Monetary Authority of Singapore and the Brunei Darussalam Central Bank signed a Memorandum of Understanding on a reciprocal cross-border collateral arrangement.
• The framework allows banks and financial institutions to pledge assets in either jurisdiction to gain liquidity access across both markets.
• The arrangement enhances operational efficiency, supports cross-border liquidity management, and strengthens market resilience in the region.
• The Currency Interchangeability Agreement of 1967 continues to underpin the bilateral monetary relationship, with both regulators planning to mark its 60th anniversary in 2027.
• The bilateral roundtable emphasised expanded cooperation in payments connectivity and broader regional financial integration.
• The agreement highlights a regulatory focus on collateral transparency and liquidity resilience, principles also reflected in international frameworks such as the United States Securities Act of 1933 and the European Union’s MiFID II.
• The partnership demonstrates a shared commitment to safeguarding financial stability in ASEAN while supporting evolving digital and traditional market infrastructures.

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US SEC Division of Corporation Finance Clarifies Application of United States Securities Laws to Liquid Staking

On 5 August 2025, the United States Securities and Exchange Commission (US SEC) Division of Corporation Finance issued a staff statement clarifying how United States securities laws apply to liquid staking. The statement confirmed that liquid staking activities, as defined, do not constitute the offer or sale of securities under the United States Securities Act of 1933 or the United States Securities Exchange Act of 1934. The guidance extends earlier SEC positions on protocol staking and provides detailed analysis on staking receipt tokens. According to the Division of Corporation Finance, registration requirements arise only where deposited crypto assets or staking receipt tokens are structured as investment contracts. While not a formal rule or binding Commission action, the statement establishes an authoritative interpretive stance that offers market participants operational certainty, subject to case-specific analysis.

• The United States Securities and Exchange Commission Division of Corporation Finance stated that liquid staking activities, as defined, are not securities transactions under Section 2(a)(1) of the Securities Act of 1933 or Section 3(a)(10) of the Securities Exchange Act of 1934.
• Applying the investment contract test from SEC v. W.J. Howey Co., 328 U.S. 293 (1946), the Division found that staking providers’ activities are administrative rather than entrepreneurial or managerial, and therefore do not meet the “efforts of others” prong.
• Staking receipt tokens were clarified as evidentiary instruments representing ownership of deposited crypto assets, not securities in themselves unless linked to an investment contract.
• Rewards are attributed to the underlying deposited crypto assets, confirming that the receipt tokens do not transform into investment products.
• The Division cautioned that models where providers guarantee rewards, exercise discretion over staking, or add yield-generating features could still fall within the securities definition.
• For crypto exchanges, custodians, and staking service providers, the statement provides operational guidance but does not replace detailed legal analysis.
• The interpretive stance aligns with previous SEC staff guidance on protocol staking and reinforces a limited application of securities laws in the liquid staking context.
• The statement emphasised that compliance obligations remain grounded in statutory law, case law precedent, and regulatory oversight, rather than in the staff statement itself.

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US SEC Commissioner Caroline A. Crenshaw Issues Response Liquid Staking Guidance: “Caveat Liquid Staker”

On 5 August 2025, United States Securities and Exchange Commission (US SEC) Commissioner Caroline A. Crenshaw issued a response to the Division of Corporation Finance’s staff statement on liquid staking. While the Division had asserted that liquid staking activities, within narrowly defined parameters, do not constitute securities transactions under the Securities Act of 1933 or the Securities Exchange Act of 1934, Crenshaw criticised the statement for offering little regulatory certainty. In her dissent, titled “Response to Staff Statement on Certain Liquid Staking Activities: Caveat Liquid Staker”, Crenshaw argued that the analysis is built on unrealistic assumptions and explicitly lacks Commission endorsement. She warned that providers relying on the statement risk exposure if their models deviate from the staff’s assumptions, concluding with the cautionary phrase: “Caveat liquid staker.”

• The United States Securities and Exchange Commission Division of Corporation Finance issued a staff statement asserting that liquid staking activities, under defined conditions, do not involve the offer or sale of securities.
• Commissioner Caroline A. Crenshaw criticised the statement as resting on “a wobbly wall of factual assumptions” that fail to reflect how liquid staking operates in practice.
• Crenshaw emphasised that the staff’s position is not binding Commission guidance and disclaims SEC endorsement, undermining its value as a reliable compliance framework.
• She warned that the Division’s conclusions apply only where every assumption about provider operations is correct, meaning any deviation could trigger securities law obligations.
• Crenshaw stressed that liquid staking entities should not treat the statement as a safe harbour, as regulatory risk persists for business models outside the assumed parameters.
• Her remarks follow her earlier critique of the Division’s May 2025 Protocol Staking Statement, where she warned against broad generalisations disconnected from real-world practices.
• The dissent highlights continuing division within the United States Securities and Exchange Commission on whether staking arrangements should be classified as securities under federal law.
• The split signals that while some within the SEC favour narrow, assumption-based exclusions, others caution that staking activities may still trigger registration and disclosure requirements.

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United States SEC puts Cboe BZX Proposal under Review to Permit Staking in VanEck Ethereum ETF

On 19 August 2025, the United States Securities and Exchange Commission (US SEC) published Release No. 34-103743; File No. SR-CboeBZX-2025-114. The notice covers a proposed rule change by Cboe BZX Exchange, Inc. to amend the VanEck Ethereum ETF’s governing rule under BZX Rule 14.11(e)(4). The amendment would permit the sponsor to stake some or all ether held by the trust through staking providers. Staking rewards would accrue to the trust. Custody would remain with the custodian, and ether would not leave the trust’s control. Public comment is invited before the US SEC decides whether to approve, disapprove, or institute disapproval proceedings. The filing was submitted on 6 August 2025. The review window is 45 to 90 days from publication.

• The VanEck Ethereum ETF was approved for listing on 23 May 2024 under BZX Rule 14.11(e)(4), governing commodity-based trust shares.
• Cboe BZX proposes a new staking section: the sponsor may stake trust ether via one or more trusted providers.
• Rewards from staking would be received by the trust and treated as income of the trust.
• Custody remains with the custodian, ensuring ether cannot leave the trust’s control during staking.
• The sponsor will not pool trust assets with third parties or advertise staking services to investors.
• The filing cites Ethereum’s proof-of-stake model and validator slashing penalties as operational context.
• The sponsor states consistency with the US SEC Division of Corporation Finance’s 29 May 2025 protocol staking statement.
• The proposal distinguishes the trust’s model from prior pooled retail staking cases involving Kraken, Binance, and Coinbase.
• Statutory basis is Section 6(b)(5) of the United States Securities Exchange Act of 1934, addressing investor protection and market integrity.
• The US SEC will decide within 45 to 90 days whether to approve, disapprove, or institute disapproval proceedings.
• Public comments should reference File No. SR-CboeBZX-2025-114 and may be submitted via the US SEC’s comment portal or email.

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United States SEC Notice of Filing and Immediate Effectiveness to Amend BOX Rule 3120 on Bitcoin ETF Options

On 20 August 2025, the United States Securities and Exchange Commission (US SEC) published notice of a filing by BOX Exchange LLC to amend BOX Rule 3120, immediately effective upon submission. The proposal raises position and exercise limits for options on the Grayscale Bitcoin Trust ETF (GBTC), the Bitwise Bitcoin ETF (BITB), and the Grayscale Bitcoin Mini Trust ETF (BTC). These products are removed from IM-3120-2, eliminating the fixed 25,000 contract cap. Position and exercise limits will now follow the graduated thresholds under Rule 3120 and Rule 3140, which adjust based on trading activity and shares outstanding. The US SEC waived the thirty-day operative delay, designating the change effective upon filing, and invited public comment under File No. SR-BOX-2025-23.

• The United States SEC confirmed that the filing, titled “Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend BOX Rule 3120 to Increase the Position and Exercise Limits for the Grayscale Bitcoin Mini Trust ETF, the Bitwise Bitcoin ETF, and the Grayscale Bitcoin Trust ETF”, became effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934 and Rule 19b-4(f)(6).
• The Commission waived the standard thirty-day operative delay, citing that the amendment does not significantly affect investor protection, impose competitive burdens, or present novel legal issues.
• The amendment removes the fixed 25,000 contract cap for GBTC, BITB, and BTC options, aligning them with the standard equity option framework on BOX.
• Position limits will now be determined by trading volume and shares outstanding over a six-month period under Rule 3120, while exercise limits will track position limits under Rule 3140.
• The filing explains that higher contract limits support hedging strategies, enhance liquidity, and strengthen regulated markets against competition from over-the-counter trading.
• The US SEC noted consistency with prior approvals on NYSE Arca and other exchanges, where similar Bitcoin ETF options already qualify for higher tiers.
• Surveillance and reporting obligations remain unchanged. Large Option Position Reporting continues to apply, with BOX coordinating oversight with FINRA and intermarket surveillance groups.
• Market Makers remain exempt from customer reporting requirements but must comply with information requests when necessary.
• The US SEC retains authority to suspend the rule within sixty days and to institute proceedings if further review is required in the public interest.
• Public comments must reference File No. SR-BOX-2025-23 and can be submitted through the SEC’s rule comment portal or via email to rule-comments@sec.gov.

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United States SEC Notice on BOX Proposal to Raise Position and Exercise Limits for iShares Bitcoin Trust ETF Options

On 20 August 2025, the United States Securities and Exchange Commission (US SEC) published Release No. 34-103747; File No. SR-BOX-2025-22. The notice covers a filing by BOX Exchange LLC to amend BOX Rule 3120 for options on the iShares Bitcoin Trust ETF, known as IBIT. The proposal would remove IBIT from IM 3120 2 and apply the graduated limits in Rule 3120 and Rule 3140. Based on volume and shares outstanding, IBIT currently qualifies for a 250,000 contract tier. The US SEC designated the filing effective on submission and waived the standard thirty day operative delay. Comments are invited under File No. SR BOX 2025 22.

• The iShares Bitcoin Trust ETF is listed on Nasdaq. Options began trading in November 2024 with a fixed 25,000 contract cap.
• BOX proposes to set IBIT limits under Rule 3120(d). The rule allows up to 250,000 contracts by tier.
• Removal from IM 3120 2 lifts the fixed cap and applies position and exercise limits by reference to market data.
• At a 25,000 cap, exercisable risk equals about 0.4 percent of IBIT shares outstanding.
• IBIT reports more than 866 million shares outstanding, qualifying for the 250,000 contract tier today.
• The US SEC has noted that position and exercise limits help deter market manipulation and disruption.
• Comparable products operate at similar tiers. GLD and SLV both use 250,000 contract limits.
• BITO also has a 250,000 cap. The IBIT tier equals about 2.89 percent of its float.
• External analyses support higher capacity. A Nasdaq ISE study modeled a limit above 565,000 contracts.
• Additional benchmarks include CME Bitcoin futures with a 2,000 contract cap and significant notional exposure.
• Cboe Bitcoin U.S. ETF Index options reference IBIT at a 20 percent weight with robust notional capacity.
• Surveillance will continue. Large Option Position Reporting remains in force with FINRA coordination.
• Financial and margin requirements constrain risks from large unhedged positions held by market participants.
• The filing became effective under Section 19(b)(3)(A)(iii) and Rule 19b 4(f)(6).
• The US SEC waived the thirty day delay. The change is operative immediately pending comment review.
• Public comments should cite File No. SR BOX 2025 22. Submissions may be made via the US SEC portal or email.

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US SEC Appoints Judge Margaret Ryan as Director of Enforcement Division

On 21 August 2025, the United States Securities and Exchange Commission (US SEC) announced the appointment of Judge Margaret “Meg” Ryan as Director of the Division of Enforcement, effective 2 September 2025. She succeeds Acting Director Sam Waldon, who will return to his prior role as Chief Counsel of the Division. The appointment reflects the Commission’s emphasis on robust enforcement of federal securities laws, with a focus on deterring fraud and manipulation in financial markets. Judge Ryan, a senior judge on the United States Court of Appeals for the Armed Forces and lecturer at Harvard Law School, brings extensive judicial and academic experience to the post.

• US SEC Chairman Paul S. Atkins welcomed Judge Ryan, emphasising her decades of judicial service and her commitment to investor protection and enforcement of securities laws.
• Chairman Atkins thanked Acting Director Sam Waldon for his service since January 2025, praising his continued role as Chief Counsel, where he provides expert legal judgment on enforcement matters.
• Judge Margaret Ryan stated that it is an honour to join the Commission, stressing her commitment to pursuing actions against those who violate securities laws and to deterring market misconduct.
• The appointment ensures continuity in the Division of Enforcement’s leadership at a time of heightened regulatory attention on crypto assets, market integrity, and systemic risks.
• Judge Ryan’s judicial career on the United States Court of Appeals for the Armed Forces and her academic contributions at Harvard Law School position her to provide authoritative oversight of enforcement priorities.
• The Division of Enforcement plays a central role in advancing the US SEC’s mission to protect investors, maintain fair and efficient markets, and ensure compliance with federal securities laws.

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UK FCA Approves London Stock Exchange as First PISCES Operator: A Capital Markets Reform to Boost Private Companies

On 26 August 2025, the United Kingdom Financial Conduct Authority (UK FCA) approved the London Stock Exchange plc (LSE) as the first operator of a Private Intermittent Securities and Capital Exchange System (PISCES) platform. PISCES, the world’s first regulated private stock market, allows trading of shares in private companies on an intermittent basis. The initiative, launched within the Financial Market Infrastructure (FMI) Sandbox, is part of the UK’s broader capital markets reform to expand funding options for high-growth companies and to create a smoother transition between private and public markets. A permanent regulatory regime for PISCES is expected by 2030.

• The United Kingdom Financial Conduct Authority confirmed that PISCES platforms will operate under FMI sandbox powers introduced by HM Treasury through a Statutory Instrument laid before Parliament in May 2025.
• The framework enables the regulator to test trading models such as periodic auctions and limited continuous trading while safeguarding investor protection.
• The London Stock Exchange will launch its Private Securities Market later in 2025, giving private companies access to regulated secondary trading for the first time.
• UK FCA Executive Director of Markets Simon Walls described the approval as a “major milestone” for unlocking capital investment and boosting growth.
• London Stock Exchange CEO Julia Hoggett highlighted that the initiative is the result of years of collaboration between industry, government, and regulators.
• Economic Secretary to the Treasury Emma Reynolds welcomed the development, noting that PISCES supports the UK Government’s Plan for Change to strengthen capital markets and improve household investment returns.
• For issuers, PISCES creates a regulated pathway to raise liquidity and broaden shareholder bases before pursuing a public listing.
• For investors, the system offers structured access to high-growth private companies, bridging a gap in UK capital markets and enhancing transparency.
• The sandbox approach allows innovation to be tested under regulatory supervision, with lessons informing the permanent regime expected in 2030.
• The UK framework for PISCES could set a precedent for global markets seeking to regulate private trading systems while balancing flexibility with investor protection.

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