Current Month (August 2026)
SEC Proposes New Regulation Crypto Assets
By Karen Liu, Reid & Wise LLC
On August 18, 2026, the U.S. Securities and Exchange Commission (“SEC”) announced its proposed new rule related to crypto assets, titled “Regulation Crypto Assets” (“Proposed Rules”), dedicated to create a fit-for-purpose offering framework for certain crypto-assets-related investment contracts, while legislation of the Clarity Act remains pending.
The Proposed Rules would include a “startup exemption” (Proposed Rule 200), a “fundraising exemption” (Proposed Rules 300 through 307), a conditional safe harbor (Proposed Rule 400) and a mechanism to preempt certain state regulatory requirements (Proposed Rule 500).
The startup exemption would be a one-time exemption from Securities Act registration requirements for offerings of “covered investment contracts” of up to $5 million during a four-year period if certain conditions are met, including, among other things, the filing of Form NOR (Notice of Reliance) prior to any offering, the filing of Form TR (Transition Report) no later than four years thereafter, and making certain principles-based narrative disclosures (which require annual updates for material changes) at a website in between.
The fundraising exemption would be a two-tier exemption from Securities Act registration requirements, modeled largely on Regulation A. Specifically, offerings of “covered investment contracts” would be permitted for up to $20 million within twelve months under Tier 1 and for up to $75 million within twelve months under Tier 2 if certain conditions are met, including, among other things, the filing of Form 1-CRYPTO (including both narrative disclosures and U.S. GAAP-compliant financial statements) prior to any offering, the filing of Form TR (Transition Report), and ongoing annual, semiannual, and current reports with the SEC. Financial statements under Tier 1 may be unaudited, but auditing would be mandatory for Tier 2 offerings.
With the proposed safe harbor, a “covered investment contract” would be deemed by the SEC not to constitute a “security” if an issuer (i) “has completed or otherwise permanently ceased all essential managerial efforts that it represented or promised it would engage in under the covered investment contract and is not making and does not intend to make any new representations or promises to engage in essential managerial efforts with respect to the crypto asset” and (ii) has filed a transition report on Form TR.
The Proposed Rules would provide a preemption mechanism by adding a definition of “qualified purchaser” under the Securities Act (which does not relate to or affect the “qualified purchaser” definition under the Investment Company Act of 1940) to include any person to whom “covered investment contracts” are offered or sold pursuant to Regulation Crypto Assets, which would thereby make such “covered investment contracts” constitute “covered securities” preempted from state registration requirements. The exemption would extend to secondary market transactions if any “covered investment contract” was initially sold by an issuer either pursuant to an exemption in Regulation Crypto Assets or another exemption under the federal securities laws.
The Proposed Rules draws on certain concepts in the Clarity Act and the GENIUS Act and is built on the SEC’s March 2026 interpretive release on certain crypto assets and transactions.
The public comment period for the Proposed Rules is open until October 20, 2026. Comments may be submitted electronically by using the SEC’s comment form or by email to [email protected], or on paper.
SEC Withdraws from Rule 14a-8 Process
By Noah B. Levin, WilmerHale
The SEC’s Division of Corporation Finance (the “Division”) announced on August 14, 2026 that it will no longer respond to Rule 14a-8 no-action requests or issue “no objection” letters regarding the exclusion of shareholder proposals, effectively ending the Staff’s substantive role in the shareholder proposal exclusion process.
Companies seeking to exclude proposals must still comply with Rule 14a-8(j) by submitting a notice of exclusion explaining the basis for exclusion and citing relevant authority. The Division stated that this change will allow Staff resources to be redirected to filing reviews and reflects the extensive body of existing Rule 14a-8 precedent and guidance available to companies and shareholder proponents.
The Division of Investment Management also announced that it will no longer provide substantive responses for investment company proposals. As a result, companies will need to rely more heavily on existing precedent, SEC guidance, and litigation risk assessments when evaluating whether to exclude shareholder proposals.
For additional discussion and practical considerations, please see WilmerHale’s blog post on the Division’s announcement.
Financial Reporting and Accounting Unit Established Within SEC’s Division of Enforcement
By Noah B. Levin, WilmerHale
On August 5, 2026, the SEC announced that a new Financial Reporting and Accounting Unit (the “Unit”) would be established within the Division of enforcement to pursue accounting and financial reporting fraud cases in addition to general misconduct in accounting and auditing areas. The Unit will be led by Timothy Zimmerman, who joined the SEC in May, and will be staffed by both attorneys and accountants specializing in financial reporting, accounting, and auditing in securities regulation.
Division of Corporation Finance Guidance Exempts Certain Data Center Securitizations from Asset-Backed Securities Definition
By Isaiah S. Chatman, WilmerHale
On July 29, 2026, the SEC Division of Corporation Finance’s Office of Structured Finance issued an interpretive response to Latham & Watkins LLP’s (“Latham”) request regarding the treatment of certain data center securitizations under section 3(a)(79) of the Securities Exchange Act of 1934. Specifically, Latham requested interpretive guidance that securities issued in the data center securitization described in its July 23, 2026 letter are not asset-backed securities for purposes of Section 3(a)(79) (“Exchange Act ABS”).
The SEC Staff agreed with Latham’s position that fixed-income or other securities issued in data center securitizations specifically set forth in the request letter are not Exchange Act ABS because the securitized assets are not “self-liquidating financial assets” and thus, investor payments are not primarily derived from cash flows from self-liquidating financial assets.
The SEC Staff limited its conclusion to the specific facts and representations set forth in the request letter and notes that distinct facts and circumstances can yield varying conclusions.
As a practical matter, the SEC’s response provides some assurance that data center securitizations as described in Latham’s request letter generally fall outside the definition of an Exchange Act ABS, supporting the view that these transactions are more akin to financings of operating a data center facility, as opposed to securitizations backed by self-liquidating financial assets.
