CLARITY Act Establishes Agency Roles, Leaves Back-Office Operations Unaddressed
A proposed piece of legislation, the CLARITY Act, aims to establish a regulatory framework for digital assets and delineate responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). While the bill addresses key areas such as registration, oversight, recordkeeping, and custody, it does not dictate how firms should reconcile their activities or modernize legacy operational processes.
Jurisdictional clarity and operational readiness represent distinct challenges. H.R. 3633, introduced by Chairman French Hill on May 29, 2025, seeks to create a comprehensive market-structure framework for digital assets.
A vote on the CLARITY Act is scheduled for September 15. The actual impact of its passage, beyond the prevailing hype, is as follows: Previously, the SEC could classify nearly any token as a security, while the CFTC was limited to pursuing fraud after it occurred. The market lacked a registration framework for crypto exchanges, leading to institutional capital remaining on the sidelines.
Under Section 401 of the bill, the CFTC would gain exclusive regulatory jurisdiction over digital commodity cash or spot transactions conducted on or with exchanges, brokers, and dealers that are required to register with the agency. The legislation also outlines an expedited registration process for these entities with the CFTC.
The SEC would retain its authority to combat fraud and manipulation in transactions involving permitted payment stablecoins and digital commodities that occur on or with an SEC-registered entity.
Section 304 would mandate that SEC registrants also registered with the CFTC as digital commodity exchanges, brokers, or dealers implement conflict-of-interest policies. Furthermore, it would require the SEC and CFTC to establish a memorandum of understanding to facilitate non-duplicative oversight and appropriate information sharing.
The regulatory framework proposed by the bill does not, in itself, resolve the operational pressures identified within the back offices of capital markets. An AutoRek report on capital markets operations, based on a survey of 250 senior leaders in operations, finance, and technology across the United States and the United Kingdom, highlights strain caused by increasing volumes, new asset classes, data fragmentation, and limited AI integration.
Among the report’s findings, 85% of respondents anticipate scalability challenges as activity grows against existing legacy processes. For firms engaged with digital assets, 59% reported disproportionate operational complexity compared to other asset classes.
The report also revealed that 41% of respondents identified data integration and compatibility as their primary operational hurdle. Firms also indicated that they lose 15.9% of their operational budgets to rework stemming from manual processes and spreadsheets.
The survey found that while 98% of firms utilize AI in some capacity within their operations, only 14% have achieved full integration across all operations. These findings pertain to operating models rather than the allocation of agency jurisdiction.
A market-structure statute can define regulatory categories and obligations without inherently integrating data, replacing manual workflows, or reconciling records across a firm’s various systems.
The bill does include provisions relevant to operational infrastructure. Section 305 would permit brokers, dealers, transfer agents, investment advisers, investment companies, and national securities exchanges to utilize records from a blockchain system to meet existing recordkeeping requirements, contingent upon SEC rulemaking within 180 days of enactment.
Section 402 would require futures commission merchants to hold customer digital assets with qualified digital asset custodians. The congressional summary also details requirements concerning recordkeeping and the commingling of customer assets.
Even if the CLARITY Act encounters delays, the broader trend toward crypto regulation in the U.S. is significant, moving from uncertainty toward a more defined framework.
These provisions address specific custody and recordkeeping matters, rather than offering a general framework for resolving the data integration or manual process challenges identified by the AutoRek survey.
If enacted, the CLARITY Act would establish a statutory framework for digital commodities, registration, and defined areas of SEC and CFTC authority. It would also introduce requirements and rulemakings related to recordkeeping, custody, disclosures, and market intermediaries.
However, the act would not, on its own, provide a detailed operating model for the data integration, rework, and scalability issues reported by capital markets operations leaders. Regulatory clarity and operational modernization can progress concurrently, but they remain separate tasks based on the available evidence.
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