CLARITY Act Splits Regulatory Duties as Critical Back-Office Rules Linger

The CLARITY Act would establish a regulatory structure for digital assets and define the responsibilities of the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC). While the legislation covers registration, oversight, custody and recordkeeping in certain areas, it does not specify how companies should reconcile transactions or upgrade legacy back-office systems.

Regulatory certainty and operational modernization address different issues. H.R. 3633, introduced by Chairman French Hill on May 29, 2025, seeks to establish a comprehensive market-structure framework for the digital-asset sector.

Under Section 401, the CFTC would have exclusive jurisdiction over cash and spot transactions involving digital commodities conducted on or through registered digital-commodity exchanges, brokers and dealers. The provision would also create an expedited CFTC registration process for those entities.

The SEC would continue to oversee fraud and market manipulation involving permitted payment stablecoins and digital commodities traded through SEC-registered entities.

Section 304 would require companies registered with both the SEC and CFTC as digital-commodity exchanges, brokers or dealers to implement conflict-of-interest policies. It would also require the agencies to establish a memorandum of understanding aimed at coordinating oversight, limiting regulatory duplication and supporting information sharing.

CLARITY Act Leaves Back-Office Challenges Unresolved

The legislation could provide greater clarity over regulatory responsibilities, but it would not directly address the operational difficulties faced by capital-markets back offices. An AutoRek survey of 250 senior operations, finance and technology executives in the U.S. and U.K. identified rising transaction volumes, new asset classes, fragmented data and limited AI adoption as key sources of operational strain.

Around 85% of respondents said they expected legacy processes to face scalability challenges as activity increases. Among firms handling digital assets, 59% reported greater operational complexity compared with other asset classes.

Data integration and compatibility were the top operational concerns for 41% of respondents. Firms also said manual processes and spreadsheet-driven workflows accounted for 15.9% of operational budgets through rework.

Although 98% of surveyed companies reported using AI in some part of their operations, only 14% said the technology had been fully integrated across their operations. The findings primarily highlight weaknesses in technology and processes, rather than regulatory jurisdiction.

A market-structure law can establish asset classifications, compliance requirements and agency responsibilities, but it cannot automatically connect fragmented systems, replace manual workflows or reconcile data across different platforms.

CLARITY Includes Limited Infrastructure Measures

The bill does contain provisions affecting operational infrastructure. Section 305 would allow brokers, dealers, transfer agents, investment advisers, investment companies and national securities exchanges to rely on blockchain records for existing recordkeeping requirements, subject to SEC rulemaking within 180 days after enactment.

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

These provisions target specific custody and recordkeeping requirements rather than the broader data-integration and workflow challenges identified in the AutoRek survey.

If enacted, the CLARITY Act would establish statutory rules for digital commodities, registration and the respective jurisdictions of the SEC and CFTC. It would also introduce requirements and regulatory rulemaking covering custody, disclosures, recordkeeping and market intermediaries.

However, the legislation alone would not resolve the scalability pressures, fragmented data or manual rework affecting capital-markets operations. Regulatory clarity and operational modernization can progress in parallel, but they remain separate challenges requiring different solutions.