Dual registrant regulatory roundup - May 2026

SEC Staff Issues Statement on Crypto Asset Securities User Interfaces

• On April 13, the SEC's Division of Trading and Markets issued a staff statement providing its views on the application of the broker-dealer registration requirements under Section 15(a) of the Securities Exchange Act of 1934 to persons that create, offer and/or operate certain user interfaces utilized to prepare transactions in crypto asset securities (Covered User Interface Providers). The statement provides that, under certain conditions, the staff will not object to a Covered User Interface Provider operating without registering as a broker-dealer.
• A "Covered User Interface" is defined in the statement as an interface provided by a website, browser, extension or other software application designed to assist users engaging in user-initiated crypto asset securities transactions on blockchain protocols utilizing the user's self-custodial wallet. To qualify for the Staff's position, a Covered User Interface Provider must satisfy a series of conditions, including, among others: permitting users to customize default transaction parameters; refraining from soliciting specific crypto asset securities transactions; limiting compensation to a fixed, product- and venue-agnostic charge; maintaining policies and controls to evaluate connected trading venues; and prominently disclosing all material facts related to its role, fees, conflicts of interest and limitations.
• The statement does not extend to Covered User Interface Providers that engage in activities such as negotiating transaction terms, making investment recommendations, holding or managing user funds or securities or executing or settling transactions. The statement notes that it represents the views of the Staff, not the Commission, and that it will be considered withdrawn five years from April 13, 2026, absent intervening Commission action. The Staff welcomes public comment on the statement.

FINRA Issues Report Charting FINRA Forward Progress

• In April, FINRA published its "FINRA Forward: A Year of Progress" report, summarizing the accomplishments and ongoing initiatives under its FINRA Forward modernization program since its launch in April 2025. The report covers FINRA's three key focus areas: rule modernization, empowering member firm compliance and combating cybersecurity and fraud threats.
• Since the launch of FINRA Forward, FINRA has completed several significant rule changes, including raising the annual gift limit from $100 to $300, modifying the Capital Acquisition Broker rules to promote capital formation, and streamlining guidance on bulk transfers of customer accounts by negative consent. FINRA has also filed proposed rule changes with the SEC on performance projections, corporate financing, outside activities and intraday margin requirements, and issued Regulatory Notice 26-06, a sweeping request for comment on modernizing virtually every aspect of FINRA's arbitration rules.
• On the compliance support front, FINRA has published its first Quarterly Regulatory Policy Agenda to help firms track regulatory priorities, launched the Financial Intelligence Fusion Center for intelligence sharing on cybersecurity and fraud threats, made its revised communications review pilot permanent, published its risk assessment framework and methodology and announced enhancements to its enforcement program – including introductory meetings at the start of investigations, pre-Rule 8210 outreach, 90-day status updates during investigations and expanded pre-Wells engagement.

FinCEN Proposes Rule to Alter Financial Institutions' AML/CFT Programs

• On April 7, the Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking to fundamentally reform the anti-money laundering and countering the financing of terrorism (AML/CFT) program requirements applicable to financial institutions under the Bank Secrecy Act (BSA). The proposed rule implements key provisions of the Anti-Money Laundering Act of 2020, emphasizing risk-based, reasonably designed programs and greater consistency in supervisory evaluations. The proposed rule supersedes a prior proposed rule published on July 3, 2024, which FinCEN has withdrawn.
• The proposed rule is significant for broker-dealers because it would formally define what constitutes an "effective" AML/CFT program. Under a new two-pronged framework, a program would be deemed effective if a financial institution both properly "establishes" the program by designing it with all required components and "maintains" it by implementing it in all material respects. The proposed rule would preserve the existing core program requirements – internal policies and procedures, independent testing, designation of a compliance officer, ongoing training and customer due diligence – but reframe them around risk-based design and demonstrated effectiveness rather than technical, check-the-box compliance. The proposed rule would also codify risk assessment processes as a formal requirement for the first time, requiring broker-dealers to evaluate the money laundering and terrorist financing risks across their business activities and to meaningfully incorporate FinCEN's AML/CFT Priorities into those assessments. Additionally, the proposed rule would require that each covered institution designate a US-based AML/CFT compliance officer.
• The proposed rule would apply broadly across financial institution types regulated under the BSA, including broker-dealers, banks, money services businesses, mutual funds, certain insurance companies and others. However, the rulemaking does not affect FinCEN's separate rulemaking establishing AML/CFT requirements for registered investment advisers and exempt reporting advisers, which has been delayed until January 1, 2028. FinCEN proposes an effective date of 12 months from issuance of the final rule. Comments on the proposed rule are due by June 9, 2026.

SEC Announces Enforcement Results for Fiscal Year 2025

• On April 7, the SEC announced enforcement results for fiscal year 2025 (ending September 30, 2025). During FY 2025, the Commission filed 456 enforcement actions (down from 583 in FY 2024 and 784 in FY 2023) – including 303 standalone actions and 69 follow-on administrative proceedings – and obtained orders for monetary relief totaling approximately $17.9 billion, of which approximately $10.8 billion was in disgorgement and prejudgment interest and approximately $7.2 billion in civil penalties. After excluding amounts deemed satisfied by parallel proceedings and the judgment in the long-running Stanford Ponzi scheme litigation, the monetary relief totaled approximately $1.4 billion in disgorgement and $1.3 billion in civil penalties. This represents a significant decline from FY 2024 ($6.1 billion in disgorgement and $2.1 billion in civil penalties) and FY 2023 ($3.4 billion in disgorgement and $1.58 billion in civil penalties). 
• The SEC noted that FY 2025 was a transition year, characterized by what it described as an "unprecedented rush" by the prior Commission to bring cases in advance of the presidential inauguration, followed by a deliberate refocusing by the current Commission on fraud-related matters. The SEC stated that it has moved away from "regulation by enforcement" and deprioritized certain categories of actions brought under prior leadership – including off-channel communications violations, non-fraud crypto offerings and novel legal theories – in favor of cases involving offering fraud, market manipulation, insider trading and breaches of fiduciary duty by investment advisers. Of the standalone actions filed during FY 2025, approximately two-thirds involved charges against individuals, a 27 percent year-over-year increase.

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