US Congress Kicks Against SEC’s SAB 121 Rules in Latest Memo
The US Securities and Exchange Commission’s (SEC) latest release of its Staff Accounting Bulletin (SAB) 121 is receiving major backlash from legislators.
Making their opinions heard in a memo dated November 15, several members of the US Congress wrote to the Chairman of the FDIC Board, Acting Comptroller of the Currency Michael Hsu, and other key financial authorities.
They aim to draw attention to the SEC’s SAB 121 ruling published on April 11, 2022.
Providing context, the band of senators stated that the SAB 121 only came into public scrutiny following a Government Accountability Office (GAO) finding, which showed that the SEC’s directive was a rule meant for the Congressional Review Act.
SAB 121 is a rule introduced by the SEC, mandating financial institutions, credit unions, and banks offering crypto custodial services to keep a specified amount of funds backing their customers’ digital assets.
Countering this directive, the US Congress unequivocally stated that the SAB 121 rule should not have any legal effect on the stated financial institutions.
Hence, these entities are not mandated to acknowledge liability and corresponding asset offsets on their balance sheets.
#NEW: Chairman @PatrickMcHenry & @SenLummis led a bipartisan, bicameral letter urging the prudential regulators not to enforce #SAB121.
The letter follows a @USGAO finding that the bulletin constitutes a "rule" for purposes of the CRA.
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