KPMG flags SEC push to modernize rules, clarify crypto oversight

The signal from SEC Speaks is not subtle

The SEC is telling the market to stop planning for a rulebook built around yesterday’s plumbing. At SEC Speaks 2026, Chairman Paul S. Atkins laid out an integrated agenda he called “A-C-T”: Advance rules to fit how markets operate today, Clarify the regime to streamline oversight and unlock innovation, and Transform requirements by stripping out burdensome or impractical rules.

For auditors, controllers, compliance teams and advisers, that is the part that matters. The value is not in the speechmaking itself. It is in the fact that the SEC is previewing where pressure will build first: disclosures, custody, crypto oversight and the boundaries between agencies.

Why this matters before the rules change

Atkins made the point in plain language that the market has moved on from paper-era assumptions. His line that paper delivery for shareholder communications should become a relic, in an age of algorithmic trading and artificial intelligence, tells you where the agency wants to lean next: less legacy process, more modernization, and more scrutiny on whether existing rules still make sense.

That matters inside KPMG because regulatory direction shapes client work long before final rule text arrives. When the SEC starts signaling a shift toward materiality, more streamlined disclosure expectations or revised custody standards, the workload shows up immediately in risk assessments, implementation planning, control design, audit documentation and board-level conversations about what has to change.

Crypto is now a disclosure and controls issue, not just a market story

The clearest near-term signal is crypto. On March 17, 2026, the SEC issued an interpretation on how federal securities laws apply to certain crypto assets and transactions, and the CFTC joined it, saying it would administer the Commodity Exchange Act consistently with the SEC’s view. The interpretation does more than take a position. It lays out a token taxonomy for digital commodities, digital collectibles, digital tools, stablecoins and digital securities.

It also addresses airdrops, protocol mining, protocol staking and wrapping of a non-security crypto asset. That breadth is important because it moves crypto from a vague policy conversation into an operational one. Teams now have to think about how these asset types flow through client accounting policies, custody arrangements, legal analyses, controls over classification and the disclosure language that follows.

For KPMG professionals, the practical question is not whether crypto is “covered” in theory. It is where a client sits on the taxonomy, what evidence supports that conclusion, and how the firm documents the knock-on effects in audit planning or advisory readiness.

Jurisdictional lines are being redrawn in real time

The SEC alert’s focus on harmonization is another early-warning sign. On January 29, 2026, Atkins and CFTC Chairman Mike Selig launched Project Crypto, a joint SEC-CFTC harmonization effort described as one of the most ambitious interagency initiatives in a generation. That tells clients two things at once: the agencies do not want a fragmented framework, and the battle over who regulates what is still being actively managed.

That is not just a policy story for Washington. When jurisdictional boundaries are clarified, engagements change. A crypto platform, broker-dealer or asset manager may need fresh analysis of which regulator’s expectations drive its controls, which disclosures matter most, and whether the firm’s current governance model can survive a more explicit line between securities and commodities oversight.

The same logic applies to advisers who help clients prepare for examinations, design compliance programs or test readiness. More clarity can reduce uncertainty, but it also raises the bar on documentation. Once the line is drawn, “we were not sure” stops being a persuasive answer.

Custody is likely to stay a pressure point

The alert also points to custody as a likely next wave. That is not a surprise. On December 17, 2025, SEC staff issued a statement on custody of crypto asset securities by broker-dealers under Rule 15c3-3, saying the Division would not object in certain circumstances if a broker-dealer deemed itself to have “physical possession” of a crypto asset security, provided it met specific access, transfer and policy requirements.

That statement matters because custody is where regulatory theory becomes testing work. Firms will need to show how assets are controlled, who can move them, what happens if a vendor fails, and whether policy language matches actual practice. In audit, that means more pressure on evidence and walkthroughs. In advisory, it means more demand for control mapping, remediation and policy updates.

The clients most affected will not be the ones talking about transformation in broad strokes. They will be the ones that have to prove, line by line, that their custody controls, exception handling and third-party arrangements actually support the position they have taken.

Materiality is back at the center of the conversation

Atkins also framed the SEC’s agenda around economic materiality, which is the kind of phrase that sounds abstract until it reaches a filing deadline. For public companies, a stronger materiality lens can change what gets emphasized in disclosures, what gets challenged in review meetings and what rises to the board or audit committee.

That has direct consequences for KPMG teams during close, busy season and planning cycles. If the SEC pushes toward a more materiality-driven approach, expect more debate over disclosure judgments, more questions about controls over nonfinancial data, and more pressure to defend why something was included, excluded or delayed. Compliance teams will feel it in the documentation burden. Audit teams will feel it in scoping decisions. Advisory teams will feel it in readiness projects and control redesign.

Commissioner Mark T. Uyeda reinforced the broader frame in his own SEC Speaks remarks, linking the agency’s work to the 250th anniversary of the Declaration of Independence. The message was not nostalgia. It was that regulation is being cast as part of a larger debate over innovation, opportunity and the limits of government intervention.

What teams should be stress-testing now

The practical move is to prepare for rule changes before the final text arrives. The highest-value work is likely to cluster around a few questions:

• Where do clients touch crypto assets, and how are those assets being classified under the SEC’s emerging taxonomy?

• Do custody controls, transfer permissions and policy language line up with the expectations signaled in Rule 15c3-3 and the March interpretation?

• Are disclosure judgments documented well enough to survive a more materiality-focused review?

• Which parts of a client’s compliance model depend on unresolved SEC-CFTC boundary questions?

• Are audit files and advisory workpapers capturing the rationale behind key decisions, not just the conclusion?

SEC Speaks 2026 was an early look at the shape of the next rulebook, held March 19-20 at the Marriott Marquis Washington, D.C., with commissioners and senior staff laying out current priorities. The takeaway for the people doing the work is straightforward: the market is changing faster than the paperwork, and the firms that win will be the ones already documenting how they plan to bridge that gap.