Webinar | April 1, 2026
12:00 p.m. – 1:00 p.m. ET
Register here.

As companies remain private longer, the importance of the private secondary market continues to grow.  Well over $60 billion in transactions are being effected through various platforms, and this does not account for other secondary transaction volume.

During this session, representatives from Nasdaq Private Market and Mayer Brown will discuss:

  • Company-sponsored liquidity programs for employees;
  • Third-party tenders and purchases using the platform;
  • Block trades;
  • Documentation and information requirements;
  • Relief from the tender rules that would be meaningful;
  • Pricing; and
  • Proximity to a liquidity event and other considerations.

The Investment Company Institute (ICI) released a white paper introducing a proposed subscription data framework (the “Framework”) for retail alternative investments. Developed by its Retail Alternatives Working Group, the Framework aims to standardize data formats and definitions used in subscription documents, improving interoperability across systems and supporting more efficient distribution.

The U.S. alternative investment landscape has shifted significantly over the past decade. The number of publicly listed companies has declined by more than half since 1996, companies are staying private longer and IPO activity has slowed. In response, sponsors and distributors have expanded access to private markets through retail-focused structures such as closed-end funds, interval funds, tender offer funds, business development companies (BDCs) and REITs.

The ICI paper also highlights regulatory developments supporting this trend, including co-investment relief, evolving SEC positions on private assets in closed-end funds, Rule 506(c) verification guidance and federal initiatives to broaden access to private markets.

Despite growth, retail alternatives face operational inefficiencies. Infrastructure remains fragmented and highly customized, with limited interoperability among recordkeeping, trading, and distribution systems. These constraints make it difficult to scale offerings to a broader retail audience.

The Working Group identifies standardized data practices as a key solution to improving efficiency, scalability, and transparency. The proposed Framework introduces consistent definitions and formats for common data elements in subscription documents. It is designed to be platform-agnostic, enabling integration across different systems without dictating how data must be transmitted.

The Framework initially covers:

  • Business development companies (BDCs);
  • Tender offer funds; and
  • Non-traded REITs.

Interval funds using existing NSCC infrastructure are excluded as they already benefit from standardized processes.

The Framework includes a detailed reference model for subscription data fields, specifying definitions, formats, required/optional status, and usage guidance to ensure consistency across market participants.

The Working Group plans to:

  • Promote industry awareness and adoption;
  • Establish governance for ongoing maintenance; and
  • Explore additional initiatives to improve operational scalability.

The Framework represents a meaningful step toward reducing operational friction in retail alternatives. Ongoing industry input is expected to refine the model and expand its applicability to additional product types.

On March 19, 2026, the SEC staff issued a new Compliance and Disclosure Interpretation (Question 116.26) addressing how Form S-3 eligibility may impact an existing at-the-market (ATM) offering.  The interpretation considers a situation where a company establishes an ATM offering while it qualifies under General Instruction I.B.1, which allows companies with at least $75 million in public float to use Form S-3 without a cap on how much they can sell, but the company’s public float subsequently falls below that threshold when the required refresh of the registration statement occurs.

The staff determined that the company is not required to reduce the size of the ATM offering to comply with General Instruction I.B.6, which imposes a one-third cap on primary offerings by smaller reporting companies.  Instead, the company may continue to sell the full amount of securities covered by the prospectus supplement that was filed before the required disclosure update even though that amount would exceed the limits that would apply if the ATM offering were being newly established after the change in eligibility.

The new interpretation effectively locks in the size of an ATM program as of the time the prospectus supplement is filed provided the company was eligible under General Instruction I.B.1 at that time.  A later decline in public float does not require the company to reduce or re-size the existing program.  However, the staff’s position does not permit an increase in the size of the ATM offering without regard to current eligibility limits and companies must continue to satisfy their ongoing disclosure obligations when they file their required disclosure updates.

Read the new Compliance and Disclosure Interpretation.

The Securities and Exchange Commission (“SEC”) issued an order approving proposed amendments (the “Proposed Amendments”) by The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) to the Exchange’s rules to enable trading of certain securities in tokenized form during the pendency of a tokenization pilot program (the “DTC Pilot”) operated by The Depository Trust Company (“DTC”).

THE PROPOSED AMENDMENTS

Definition of Security

The Proposed Amendments amend Nasdaq’s definition of a security to mean, in part, a “security” as defined in Section 3(a)(10) of the Securities Act of 1933, that is either listed on the Exchange or traded on the Exchange pursuant to unlisted trading privileges.  The Proposed Amendments will permit securities to be traded on Nasdaq in:  (i) traditional form, meaning a digital representation of ownership and rights that does not use blockchain technology; or (ii) for the duration and under the terms of the DTC Pilot, in tokenized form.

Fungibility and Equal Rights

A share of a tokenized security is tradable on the same order book as, and with the same execution priority as, its traditional counterpart, provided the tokenized security is fungible with, shares the same CUSIP number and trading symbol as, and affords its shareholders the same rights and privileges as, a share of an equivalent class of the traditional security.  A tokenized security will be deemed to provide the same rights and privileges as a traditional security if, among other things, it conveys:  (i) an equity interest in the underlying company; (ii) a right to receive any dividends issued by the company to its shareholders; (iii) a right to exercise any voting rights to which shareholders are entitled; and (iv) a right to receive a share of the company’s residual assets upon liquidation.

Eligible Securities

Securities eligible for tokenization will be limited to: (i) securities in the Russell 1000 Index at the time the service launches, as well as any subsequent additions to the index (notwithstanding subsequent removals); and (ii) ETFs that track major indices, such as the S&P 500 index and Nasdaq-100 index.  Nasdaq plans to publish periodic alerts to identify the securities that may be traded in tokenized form.

Order Entry and Tokenization Flags

The Proposed Amendments will amend the Exchange’s Order Entry Rule to establish the process by which Nasdaq market participants eligible to participate in the DTC Pilot can indicate their preference to clear and settle an eligible security in tokenized form.  To do so, the participant will select a designated flag at the time of order entry.  This flag will communicate the participant’s preference regarding the form of the security (tokenized or traditional) and may include additional information or instructions required by DTC, such as the selection of a blockchain and digital wallet address.  Nasdaq’s systems will not verify whether a market participant qualifies to participate in the DTC Pilot or whether a security qualifies as an eligible security at the time of order entry and tokenization flag selection.  Similarly, Nasdaq will not assess DTC’s ability to execute a tokenization order for other reasons, including when a participant seeks to mint a token on a blockchain that is incompatible with the DTC Pilot or deposit it in a wallet that is not registered with DTC.  Therefore, if, at the time of order entry, the market participant is not an eligible market participant, the security is not an eligible security, or DTC is otherwise unable to execute the tokenization preference, DTC will settle the executed order in traditional (non-tokenized) form.

Execution Priority and Order Routing

The Proposed Amendments will amend Nasdaq’s Book Processing Rule to clarify that execution priority will not be impacted by the fact that an order contains tokenized securities or indicates a preference to clear and settle securities in tokenized form.  The Proposed Amendments will also amend Nasdaq’s Order Routing Rule to provide that when the Exchange routes orders in eligible securities that eligible market participants have designated for clearing and settlement in tokenized form, the Exchange will communicate this tokenization instruction to DTC upon receiving an execution for an order that was routed to another trading venue.

IMPLEMENTATION TIMING

The Proposed Amendments will become effective once the required infrastructure and post-trade settlement services are established by DTC.  Nasdaq will notify its members in an alert at least 30 calendar days before the Exchange begins trading securities in tokenized form.

CONCLUSION

The SEC’s approval of the Proposed Amendments marks a significant development in the integration of blockchain technology into traditional securities markets by establishing a framework for trading tokenized securities within existing regulatory structures.  Nasdaq has indicated that alternative forms of tokenization and clearance and settlement are also under discussion, and that future adoption of alternatives to the DTC Pilot will be undertaken by means of a separate proposed rule change filing.

For a discussion of the DTC Pilot, please see our Legal Update.

FINRA’s proposal would expand investor access to performance projections and targeted returns to more closely align FINRA Rule 2210 with the IA Marketing Rule

The Financial Industry Regulatory Authority, Inc. (“FINRA”) recently filed with the U.S. Securities and Exchange Commission proposed amendments (the “Proposed Amendments”) to FINRA Rule 2210 (Communications with the Public) to permit a member, when certain conditions are met, to include certain projections or provide a targeted return with respect to a security, a securities portfolio, or an asset allocation or other investment strategy in its communications. The conditions are intended to help ensure that such projected performance or targeted returns have a reasonable basis, are accompanied by certain disclosures, and that members sharing such information have written policies and procedures reasonably designed to ensure the communications are relevant to the likely financial situation and investment objectives of their audience.

We provide an overview of the Proposed Amendments and related guidance in the Proposing Release.

Continue reading this Legal Update.

On March 17, 2026, the Securities and Exchange Commission issued an interpretation that provides guidance regarding how the federal securities laws apply to certain crypto assets and to certain transactions involving crypto assets.  Consistent with the recent MoU between the agencies, the Commodity Futures Trading Commission joined in this interpretation and guidance confirming that CFTC staff will administer the Commodity Exchange Act consistent with the release.  This is separate from, and is not, the anticipated “innovation exemption.”  The SEC Chair commented in separate remarks regarding his views on that exemption and other matters on the same day.

This guidance provides a “token taxonomy” for digital commodities, digital collectibles, digital tools, stablecoins and digital securities.  Consistent with prior guidance and historic views, it confirms that:

  • Digital commodities are not securities; these are crypto assets intrinsically linked to, and that derive their value from, the programmatic operation of a crypto system that is “functional,” as well as supply and demand dynamics, rather than from the expectation of profits from the managerial efforts of others;
  • Digital collectibles are not securities;
  • Digital tools are not securities;
  • Stablecoins defined in a manner consistent with the GENIUS Act are not securities;
  • Digital securities (or tokenized securities) are securities;
  • Protocol mining and protocol staking do not involve the offer or sale of a security;
  • Wrapping of a non-security crypto asset (in the manner described in the interpretation) does not involve the offer or sale of a security; and
  • “Airdrops” do not involve an “investment of money” as it is understood under the Howey test.

In the guidance, the SEC provides a framework relating to how a “non-security crypto asset” may become subject to, and how it may cease to be subject to, being considered an investment contract.

In a speech on the same day, titled “The Last Chapter in the Book of Howey,” the Director of the SEC’s Division of Corporation Finance states that, “The Commission’s Interpretive Release provides a taxonomy that classifies which crypto assets are not securities versus those that are securities.  Beyond that, it gets right to the heart of clarifying when, in the Commission’s view, a crypto asset is subject to an investment contract and, importantly, when it ceases to be subject to an investment contract.  A crypto asset that is not itself a security is considered subject to an investment contract when it is accompanied by representations or promises to undertake essential managerial efforts that satisfy the Howey test.  The Interpretive Release also provides guidance on the nature of those representations or promises that may help form an investment contract, including the source of the representations or promises, the medium by which they are communicated and their level of detail.  The Interpretive Release represents the last chapter in the tale of Howey that brought us the landmark Supreme Court decision clarifying when an opportunity to earn a profit represents the offer of a security.  Perhaps this guidance serves as a perfect storybook ending for the “investment contract” made famous by Howey and his orange groves some 80 years ago.”  We suspect that since product innovation is never ending, there may be additional chapters to come.

Read the SEC’s fact sheet, the SEC’s press release, the release, published jointly, and the full remarks from the Director of the Division of Corporation Finance.

A detailed client alert with commentary will follow.

Today, the Securities and Exchange Commission proposed amendments to Securities Exchange Act Rule 15c2-11.  Subject to several exceptions, the Rule requires certain current information to be publicly available for brokers and dealers to publish quotations for, or to maintain a continuous quoted market in, a security.  In 2020, amendments to Rule 15c2-11 surprised market participants.  The amendments were applied for the first time to fixed income securities.  The SEC provided exemptive relief for fixed income securities sold in reliance on Rule 144A in response to a rulemaking request (see Exchange Act Release No. 98819, Nov. 2, 2023).  To address concerns from industry participants, the SEC also provided exemptive relief and issued no-action letter guidance (most recently in 2024) for certain fixed income securities.  Of course, this still did not address fully all fixed income securities.

Now, the proposed amendments would, among other things, replace the terms “security” and “securities” in the Rule with the terms “equity security” or “equity securities” as defined in Exchange Act Rule 3a11-1.   A detailed client alert will follow.

See the fact sheet and the proposing release.  The comment period will remain open for 60 days after the date of publication of the proposing release in the Federal Register.

For a more detailed discussion, read our Legal Update here.

On March 13, 2026, the Securities and Exchange Commission’s (the “SEC”) Division of Corporation Finance (the “Division”) stated in a no-action letter to an Israeli company that it would not recommend enforcement action to the SEC if the directors and officers of the company requesting relief do not file the beneficial ownership reports required by Exchange Act Section 16(a) until April 20, 2026.  As we have previously written about, the Holding Foreign Insiders Accountable Act amended Section 16(a) of the Exchange Act to require directors and officers of certain foreign private issuers (“FPIs”), including the requesting company, to comply with the Section 16(a) reporting requirements beginning on March 18, 2026. 

The company, which is an Israeli FPI, highlights in its incoming letter the challenges of beginning to timely comply with the Section 16(a) requirements in light of the ongoing conflict in the Middle East.  These challenges include restrictions on non-essential workplace activities, shelter-in-place orders, and interruptions to telecommunications, all of which have made it difficult to gather information from directors and officers.  As a condition to its request, the company agreed to “ensure that its directors and officers will comply with the new filing obligations by April 20, 2026,” with the caveat that, depending on the current situation at such time and throughout the intervening time period, the company may request an additional extension by which it will comply with the new requirements. 

Further, the Division extended this no-action position to directors and officers of other FPIs organized and headquartered in Israel and other foreign jurisdictions impacted by the ongoing conflict in the Middle East, as long as such FPIs “can represent that their ability to comply with the March 18, 2026 filing deadline mandated by the Holding Foreign Insiders Accountable Act has been materially affected by the direct effects of the conflict.”  Read the Division’s letter.

On March 12, 2026, the Securities and Exchange Commission’s Division of Corporation Finance (the “Division”) published two new FAQs on the application of the Holding Foreign Insiders Accountable Act to officers and directors of certain foreign private issuers (“FPIs”).  As we have previously discussed, pursuant to the Act, these individuals are required to report their beneficial ownership in the FPI’s securities under Section 16 of the Securities Exchange Act, beginning no later than March 18, 2026.  In the FAQs, the Division confirmed that, in light of the large volume of Form IDs being submitted at this time, it will not recommend enforcement action against a person for failure to timely file a required Section 16(a) report in the following circumstances:

  • A director or officer of a FPI (i) submitted a completed Form ID application and related required documents for EDGAR access before March 18, 2026, (ii) did not receive EDGAR access by the filing date and (iii) files the required Section 16(a) report after receiving EDGAR access but in no event later than April 1, 2026.
  • A director, officer, or 10% or greater beneficial owner of a domestic issuer (i) submitted a completed Form ID application and related required documents for EDGAR access for a Section 16(a) report with a filing deadline between December 18, 2025 and March 18, 2026, (ii) did not receive EDGAR access by the filing date and (iii) files the required Section 16(a) report after receiving EDGAR access but in no event later than April 1, 2026.

The domestic issuer must identify the Section 16(a) report as a late report in its disclosure pursuant to Item 405 of Regulation S-K, and can disclose its reliance on this no-action position in such disclosure.

Find the new FAQS here (numbers 6 and 7).

On March 12, 2026, the Commodity Futures Trading Commission (“CFTC”) released two documents regarding “event contract” derivatives traded on prediction markets. The CFTC issued an Advance Notice of Proposed Rulemaking (“ANPRM”) requesting public comment on the regulation of prediction markets. The CFTC’s Division of Market Oversight issued a staff advisory providing guidance to designated contract markets on the listing and trading of event contracts (the “Staff Advisory”).

Comments on the ANPRM are due 45 days after publication in the Federal Register, which is expected shortly. We provide background on key aspects of the ANPRM and Staff Advisory.

Continue reading this Legal Update.