Cryptos and NFTs are not common assets. They have specific characteristics and are blockchain-based, which is why SEC and CFTC have been working together on amending Form PF.
SEC and CFTC work four-handedly on Form PF
In 2008 following the major crisis involving Lehman Brothers over opaque products with dubious funds inside or so-called subprime mortgages, the Securities and Exchange Commission (SEC) established Form PF, a document within which the type of financial instrument, its specifications, and the amounts held in the portfolio should be noted.
Today, the cryptocurrency market cubes more than a trillion dollars, and its weight is beginning to be felt in global finance, to the point that U.S. regulators have been questioning whether or not to implement Form PF and how to do so.
Essentially, the question turns out to be whether or not to report on a document that is a kind of U.S. tax return of instruments to date that are widespread and fairly well capitalized based on blockchain and cryptocurrencies.
Both questions have been answered, and the result is a joint effort between the SEC and the Commodity Futures Trading Commission (CFTC), which have decided to modify the document so that digital currencies and NFTs can also find space within it with specific entries and consequently can be monitored by the relevant authorities should the need arise.
Financial products affected by Form PF
In addition to the aforementioned assets, CTFs and funds that in various capacities (short or otherwise) are based on cryptocurrency or Bitcoin itself are also to be reported in the SEC document, and this will be an element of discussion between August this year (the month in which the working proposal will be open to amendments) to October 11, the date set as the deadline for its closing.
The SEC and CFTC‘s four-handed proposal states:
“The proposal would add a new asset subclass for digital assets and define the term ‘digital asset’.”
In short, the strategic reference asset of digital currencies, NFT, and products based on it, will be officially recognized and monitored by finance to protect them and savers who as of today have one more reason to sleep soundly.
While waiting for the end of the work and digital control upgrades that Form PF will introduce in the cryptocurrency and NFT world, U.S. regulators let it be known that they expect from investors reports on blockchain products held by them.