SIFMA Statement on Introduction of Resolution to Address SAB 121
Washington, DC, February 1, 2024 – SIFMA issued the following statement from president and CEO Kenneth E. Bentsen, Jr. regarding a Congressional Review Act resolution introduced today related to the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 121 (SAB 121):
“SIFMA thanks Senator Lummis, Congressman Flood and Representative Nickel for their efforts to address Staff Accounting Bulletin No. 121 (“SAB 121”), which the SEC issued without stakeholder engagement or consultation with the prudential regulators to fundamentally change the way financial institutions are expected to account for the custody of digital assets. SAB 121’s requirement for balance sheet recognition deviates from current accounting treatment for traditional assets held in custody, which are not required to be recorded on a firm’s balance sheet. Because of its impact on bank capital and liquidity ratios, SAB 121 has disincentivized banks from providing custodial services for digital assets. We do not disagree with the need for regulatory oversight, but the process should be deliberate and comprehensive to avoid unintended knock-on effects. Banks are already subject to extensive prudential rules and oversight and have deep expertise in providing safe custody of a wide variety of assets. SIFMA has consistently supported congressional action to bring attention to this issue and restore the ability for banks to provide such services for their clients, and we thank Senator Lummis and Congressmen Flood and Nickel for their leadership today.”
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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).