1. NYSE Files Immediately Effective Rule Change To Enable Trading of Securities in Tokenized Form
On April 17, the Securities and Exchange Commission (SEC) published with immediate effectiveness a New York Stock Exchange (NYSE) proposed rule change that permits the trading of securities on the exchange in tokenized form. Tokenization is treated as a post-trade settlement preference: Tokenized and traditional shares of the same eligible security trade on the same NYSE order book and with the same execution priority, but eligible member organizations may flag at order entry that the trade should be cleared and settled in tokenized form, with no need for a parallel venue, separate execution path, or bespoke exemptive relief. During the pilot period, the eligible universe is limited to Russell 1000 constituents and exchange-traded funds tracking major indices, member organizations bear sole responsibility for confirming their own and the security’s eligibility, and trades default to traditional settlement when any eligibility condition is not met. The rule change operates during the pendency of The Depository Trust Co.’s (DTC) three-year tokenization pilot authorized by a December 2025 SEC no-action letter. The DTC plans to launch the service in the second half of 2026 in partnership with Digital Asset on its Canton Network, a permissioned blockchain on which DTC will mint tokenized representations of DTC-custodied U.S. Treasury securities and other eligible assets. The SEC release is available here; the Federal Register notice here; the December 11, 2025 SEC no-action letter here; and DTCC’s Canton Network partnership announcement here.
2. CFTC-State Litigation Escalates, Sixth Circuit Sides With Ohio, and Congress Advances Parallel Responses
The federal-state jurisdictional fight over Commodity Futures Trading Commission (CFTC)-registered prediction markets escalated in late April. On April 21, New York Attorney General Letitia James sued Coinbase Financial Markets Inc. and Gemini Titan LLC in New York Supreme Court (Manhattan), alleging their sports, election, and entertainment event contracts are “quintessentially gambling” offered without a New York State Gaming Commission license and to under-21 users, and seeking disgorgement, treble penalties, restitution, and a campus-marketing injunction. On April 24, the CFTC sued New York in the Southern District of New York for declaratory and injunctive relief based on its asserted exclusive jurisdiction over event contracts, and simultaneously filed an amicus brief in Commonwealth of Massachusetts v. KalshiEX LLC, No. SJC-13906. Then, on April 28, the CFTC filed its fifth such state suit, against Wisconsin, after that state sued Kalshi, Polymarket, and Coinbase for asserted felony gambling violations. Chairman Michael S. Selig warned that “if you interfere with the operation of federal law in regulating financial markets, we will sue you,” and reiterated in a May 1 Wall Street Journal letter that the CFTC “holds exclusive authority over prediction markets,” rebutting claims that “insider trading is rampant” and warning that overregulation would push markets offshore.
Appellate outcomes have diverged sharply. The Third Circuit ruled for Kalshi against New Jersey earlier this year, holding that the company’s sports event contracts likely fall within the CFTC’s exclusive jurisdiction and enjoining state enforcement. The Sixth Circuit moved in the opposite direction: On April 24, a panel denied KalshiEX LLC’s emergency-injunction request against Ohio Casino Control Commission enforcement, clearing the way for Ohio’s $5 million penalty and fast-tracking the appeal, and the Sixth Circuit had previously denied emergency relief in a parallel Tennessee/Ohio posture, creating an intra-circuit split. The Ninth Circuit, which heard consolidated argument on April 16 in the Kalshi appeal from Nevada, appeared notably skeptical of the exchanges’ position — the panel pressed counsel hard on CFTC Rule 40.11(a)’s gaming carve-out and on the exchanges’ agreement to abide by CFTC regulations as the public-interest “gatekeeper.”
Congress moved in parallel: The Senate unanimously passed a resolution by Sen. Bernie Moreno (R-Ohio) barring senators and staff from trading on prediction markets, and on April 30 Sens. Dave McCormick (R-Pa.) and Kirsten Gillibrand (D-N.Y.) introduced the Prediction Market Act of 2026, bipartisan legislation establishing a comprehensive federal framework for event-contract markets — including enhanced designated contract market (DCM) certification standards and customer protections — alongside Sen. Richard Blumenthal’s (D-Conn.) competing S. 4060 (Prediction Markets Security and Integrity Act of 2026).
On a parallel product-side track, on April 30 the SEC granted accelerated approval to a Nasdaq MRX proposal to list and trade cash-settled, all-or-nothing Outcome-Related Options (OROs) tied to the Nasdaq-100 and Nasdaq-100 Micro indices, finding the binary contracts “consistent with the requirements of the [Exchange] [A]ct”; Cboe Global Markets is reportedly targeting a Q2 launch of similar all-or-none contracts. However the courts ultimately resolve the Commodity Exchange Act (CEA) preemption question, the CFTC’s asserted exclusive jurisdiction has well-established outer limits: In Federal Trade Commission v. Ken Roberts Co., 276 F.3d 583 (D.C. Cir. 2001), the D.C. Circuit held that the CEA’s “exclusive jurisdiction” clause did not displace the FTC’s authority to investigate deceptive marketing of commodities-trading educational materials, reasoning that the clause reaches the trading of futures rather than the broader advertising and marketing of products related to those markets — a distinction that has obvious resonance for state efforts to police DCM marketing, age-gating, and consumer-protection conduct that the CEA does not directly address. The CFTC’s New York, Massachusetts, and Wisconsin press releases are available, respectively, here, here, and here; the New York Office of the Attorney General’s release here; the Sixth Circuit case docket here; Selig’s WSJ letter here; the McCormick press release here; the Fox News coverage of the Senate ban here; and Reuters’ coverage of the Nasdaq MRX OROs approval here.
3. OCC Issues Interim Final Rule on National Bank Noninterest Fees and Preempts Illinois Interchange Fee Prohibition Act
On April 24, the Office of the Comptroller of the Currency (OCC) issued two interim final actions ahead of the July 1, 2026 effective date of the Illinois Interchange Fee Prohibition Act (IFPA). OCC Bulletin 2026-18 amends 12 C.F.R. § 7.4002 to confirm that national banks may charge noninterest fees, including interchange fees from credit and debit card operations, “regardless of whether those fees are set by the bank or a third party.” OCC Bulletin 2026-17 separately concludes that the National Bank Act and the Home Owners’ Loan Act preempt the IFPA, which had barred national banks and federal savings associations from receiving interchange fees on the tax and gratuity portions of card transactions and restricted use of transaction data. OCC Bulletins 2026-18 and 2026-17 are available, respectively, here and here.
4. CFPB Finalizes Streamlined Section 1071 Rule and Treasury Adopts Anti-Abuse Conditions on CDFI Fund Programs
Federal regulators reset two pillars of small-business and community-lending policy in late April. On April 30, the Consumer Financial Protection Bureau (CFPB), under Acting Director Russell Vought, issued a final rule under Section 1071 of the Dodd-Frank Act (Regulation B) that substantially narrows the Biden-era small-business lending data-collection regime. The rule raises the loan-volume coverage threshold from 100 to 1,000 small-business originations in each of the prior two years, exempts Farm Credit System lenders and agricultural lending, excludes merchant cash advances and small-dollar business loans of $1,000 or less, and narrows the “small business” definition to applicants with $1 million or less in gross annual revenue. It is effective June 30. On April 27, the Treasury separately announced new anti-abuse measures for Community Development Financial Institutions (CDFI) Fund programs, adding antidiscrimination compliance conditions to CDFI eligibility and tightening certification, monitoring, and contractual requirements for award and tax-credit recipients, alongside a proposed funding reduction of roughly 63 percent. The CFPB’s Federal Register notice is available here; Reuters’ coverage here; Treasury’s CDFI press release here.
5. SEC Leadership Pushes “Make IPOs Great Again” Capital-Formation Agenda
In back-to-back late-April appearances, SEC leadership advanced an explicit agenda to revive the U.S. IPO market and reduce regulatory friction on capital formation. On April 24, Commissioner Hester M. Peirce delivered “Green Lighting Capital Formation,” arguing that government-led capital allocation “tend[s] to inhibit, rather than encourage, human flourishing” and that “good regulation can foster healthy capital formation,” while urging a globally coordinated, principles-based approach to facilitating cross-border capital raising. On April 28, Chair Paul S. Atkins, joined by Peirce and Commissioner Mark T. Uyeda, addressed the Small Business Capital Formation Advisory Committee (SBCFAC). Atkins identified reinvigorating an IPO pipeline that has “diminished by roughly 40 percent since the mid-1990s” as among his “highest priorities,” noting that companies today typically do not go public until after a Series E round (compared with Series B or C 20 years ago) and announcing his “Make IPOs Great Again” agenda. He directed staff to evaluate (i) a regulatory IPO “on-ramp” that does not automatically terminate five years after IPO, (ii) substantially expanding access to Form S-3 “shelf registration” by liberalizing the “baby shelf” rules, and (iii) giving issuers the option to file periodic reports quarterly or semiannually. Peirce’s companion “Getting All Your Ducks in a Row to IPO” remarks focused on coordinating disclosure, financial-statement, and underwriting workstreams. Peirce’s “Green Lighting” remarks are available here; Atkins’ SBCFAC remarks here; and Peirce’s “Getting All Your Ducks in a Row” remarks here.
