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Report on Distributed Ledger Technology: Implications of Blockchain for the Securities Industry

Comment Period Expired: March 31, 2017

This paper provides an overview of distributed ledger technology, highlights some key applications being explored in the securities industry and potential impact of the technology, and discusses key implementation and regulatory considerations for broker-dealers. 

FINRA welcomes an open dialogue with market participants to help proactively identify and address any potential risks or hurdles in order to tap into the full potential of DLT, while maintaining the core principles of investor protection and market integrity. Technological innovations in the industry, operating in accordance with these core principles, have the potential to provide investors with greater access to services and enhanced experiences, offer firms increased operational efficiencies and enhanced risk management, and enable further transparency in the marketplace.

This paper is intended to be an initial contribution to an ongoing dialogue with market participants about the use of DLT in the securities industry. Accordingly, FINRA is requesting comments from all interested parties regarding all of the areas covered by this paper. FINRA also requests comments on any related matters for which it would be appropriate to consider additional guidance, consistent with the principles of investor protection and market integrity, based on DLT applications and their implications for FINRA rules.

Direct inquiries regarding this paper to Haimera Workie, Senior Director, Office of Emerging Regulatory Issues, at (202) 728-8097; or Kavita Jain, Director, Office of Emerging Regulatory Issues, at (202) 728-8128.

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The views, expressions, findings and opinions expressed in the comments on this Web page are solely those of the author(s) and FINRA accepts no responsibility for the content of the comments:

Date Commenter Format - Size
2/17/2017 Ouisa Capital, LLC PDF - 444 KB
3/29/2017 WSBA PDF - 360 KB
3/30/2017 Neighborly PDF - 114 KB
3/31/2017 Swift PDF - 251 KB
3/31/2017 SIFMA PDF - 781 KB
3/31/2017 Managed Funds Association PDF - 102 KB
3/31/2017 CFA Institute PDF - 68 KB
3/31/2017 Nasdaq PDF - 1.8 MB
3/31/2017 Stephen Obie PDF - 169 KB
3/31/2017 PDF - 2 MB
3/31/2017 R3 CEV Ltd PDF - 5.5 MB
3/31/2017 Chamber of Digital Commerce and Structured Finance Investment Group PDF - 223 KB
3/31/2017 Fidelity Investments PDF - 45 KB