CLARITY Act Draws SEC-CFTC Lines but Leaves Key Details Unresolved

The CLARITY Act would create a regulatory structure for digital assets and divide oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission. The legislation covers areas such as registration, supervision, recordkeeping and custody, but it does not specify how financial firms should reconcile transactions or update outdated operational systems.

Regulatory certainty and operational preparedness represent two separate challenges. H.R. 3633, introduced by Chairman French Hill on May 29, 2025, seeks to establish a broad market-structure framework for digital assets.

Under Section 401, the CFTC would have exclusive authority over digital-commodity cash and spot transactions conducted on or through digital-commodity exchanges, brokers and dealers that must register with the agency. The legislation would also create an accelerated registration process for those businesses.

The SEC would continue to exercise anti-fraud and anti-manipulation powers over transactions involving permitted payment stablecoins and digital commodities conducted on or through entities registered with the SEC.

Section 304 would require SEC-registered firms that also hold CFTC registrations as digital-commodity exchanges, brokers or dealers to implement conflict-of-interest policies. It would also direct the SEC and CFTC to establish a memorandum of understanding designed to avoid overlapping supervision and facilitate appropriate information sharing.

The Operational Issues the CLARITY Act Leaves Unresolved

The bill’s regulatory provisions do not directly address the operational challenges facing capital-markets back offices. An AutoRek report, based on a survey of 250 senior operations, finance and technology executives in the U.S. and U.K., highlighted growing pressure from higher transaction volumes, emerging asset classes, fragmented data and limited AI adoption.

The survey found that 85% of respondents anticipated scalability problems as activity increases while legacy processes remain in place. Among companies handling digital assets, 59% said these assets created significantly greater operational complexity than other asset classes.

Data integration and system compatibility ranked as the biggest operational challenge for 41% of respondents. Firms also said manual processes and spreadsheet-based work resulted in 15.9% of their operational budgets being consumed by rework.

Although 98% of surveyed firms said they use AI in at least some operational functions, only 14% reported having integrated the technology throughout their operations. These findings relate to business processes and technology infrastructure rather than regulatory jurisdiction.

A market-structure law can establish asset classifications, regulatory responsibilities and compliance requirements, but it does not automatically integrate fragmented data, eliminate manual workflows or reconcile information across a company’s different systems.

Where the CLARITY Act Addresses Infrastructure

The legislation does include several provisions with implications for operational infrastructure. Section 305 would permit brokers, dealers, transfer agents, investment advisers, investment companies and national securities exchanges to rely on blockchain-system records to satisfy existing recordkeeping obligations, subject to SEC rulemaking within 180 days after enactment.

Section 402 would require futures commission merchants to safeguard customer digital assets with qualified digital-asset custodians. The congressional summary also outlines provisions covering recordkeeping and the separation of customer assets.

These measures focus on particular custody and recordkeeping requirements rather than offering a broad solution to the data-integration and manual-processing problems highlighted by the AutoRek research.

If passed, the CLARITY Act would establish statutory rules for digital commodities, registration requirements and defined areas of SEC and CFTC jurisdiction. It would also introduce requirements and future rulemaking covering custody, recordkeeping, disclosures and market intermediaries.

However, the legislation would not independently create a detailed operating framework for the scalability, data-integration and rework problems identified by capital-markets operations executives. Regulatory certainty and modernization of financial infrastructure can progress simultaneously, but based on the available evidence, they remain distinct challenges.

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