An upcoming House Appropriation budget may prevent the US Securities and Exchange Commission (SEC) from implementing its controversial Staff Accounting Bulletin 121 (SAB 121).
FOX Business reporter Eleanor Terrett broke the news on June 4, stating that the bill would bar the SEC from using appropriated funds to enforce the rule. Appropriations allow agencies to incur obligations and make payments from the US Treasury for specific purposes.
One policy rider in the budget specifically states, “Prohibits the SEC from implementing or enforcing Staff Accounting Bulletin No. 121, which implements harmful digital asset requirements.”
The fate of this budget remains uncertain. While the House, currently Republican-majority, is expected to pass the appropriation bill in a June 5 hearing, the Senate, with a Democratic and Independent majority, will need to negotiate its own version against the House’s.
According to Terret, Democratic support for a previous resolution with a similar aim, H.J. Res. 109, suggests that the Senate may leave the rider intact in the budget.
Aside from the SAB 121 controversy, the bill also seeks to provide the SEC with $2 billion in total funding in 2025, compared to the $2.59 billion requested by SEC chair Gary Gensler.
Commissioner Mark Uyeda of the SEC is in favor of repealing SAB 121, citing concerns about the rule being introduced through a regulatory edict rather than through the usual rulemaking process under the Administrative Procedure Act (APA). Uyeda expressed disappointment in President Joe Biden’s veto of H.J. Res. 109, calling it an overreach by the administrative state.
Despite efforts to overturn SAB 121, which requires financial institutions to record customers’ digital assets on their balance sheets, the resolution was vetoed by Biden on May 31. This move was met with criticism from House lawmakers, the American Bankers Association, and other groups, who argued that overturning the bulletin was necessary to protect consumers and investors.
As the budget battle continues, the fate of SAB 121 hangs in the balance, with stakeholders on both sides of the issue closely watching the developments.
