Davis Polk Releases 2023 Regulatory Reform Forecast

Davis Polk recently released the “Financial Services Regulatory Reform: Winter Forecast Edition” which includes a look at the financial regulatory landscape across a number of topics and agencies including the Federal Reserve, the SEC, and Treasury, among others. The forecast highlights the Fed’s focus on creating safer and more stable financial markets, which includes an emphasis on capital requirements, stablecoins, and operational resilience in the face of a variety of potential risks. Other areas of focus for financial services regulators include: digital assets, securities market structure, climate, AI/alternative data, and several other key areas. Regarding securities market structure, the report summarizes the recent SEC proposals covering market structure, trading in US Treasurys, and potential changes to the settlement cycle. On digital assets, the report notes that while consensus on Capitol Hill on digital assets may be building, the legislative process continues to experience “roadblocks,” and notes that “near-term change to largely occur through action by the federal bank and market regulators.”