Zachary J. Zweihorn

Mr. Zweihorn is counsel in Davis Polk’s Financial Institutions Group and the trading and markets practice. [Full Bio]

Latest Articles

After a several month lull that led some to question the SEC’s focus on crypto enforcement, this week saw a spate of enforcement activity involving crypto assets: several SEC enforcement actions, an SEC trading suspension order, the first FINRA cryptocurrency enforcement action, and a preliminary court decision consistent with the view that ICO tokens may be (and perhaps often are) securities.  These actions give life to SEC Chairman Clayton’s statement that “to the extent something…
The Director of the SEC’s Division of Trading and Markets, Brett Redfearn, recently provided an update on the status of the consolidated audit trail (the “CAT”), which is being developed by the SROs and Thesys Technologies, LLC, the CAT plan processor.  The public statement noted that although the SROs were required to begin reporting to the CAT on November 15, 2017 under the CAT NMS Plan approved by the SEC, reporting has not yet begun.…
In the first major trading and markets initiative under SEC Chairman Jay Clayton, on March 14, 2018, the SEC proposed to establish a transaction fee pilot program to study the effects of maker-taker fee structures. A pilot study was initially recommended by the SEC’s Equity Market Structure Advisory Committee in 2016, and the Treasury Department also expressed support for such an initiative in last year’s report on capital markets regulation (see our previous blog post
The past few days have seen several interesting developments in the law and regulation of digital tokens.  Each action reflects an intense focus by U.S. regulators to clarify the treatment of digital tokens, from those issued by startups in initial coin offerings (ICOs) to the more “traditional” cryptocurrencies such as bitcoin and litecoin, as well as the regulatory status under U.S. law of persons engaging in certain activities involving digital tokens.  These actions are merely…
Responding to a 2016 request by the SEC (in consultation with the Treasury Department), FINRA recently reviewed the extent to which various FINRA rules apply to U.S. Treasury securities.  Following up on that analysis, on February 6, 2018, FINRA issued Regulatory Notice 18-05, requesting comment on whether it should eliminate certain exclusions from the application of its rules for U.S. Treasury securities and other government securities.  FINRA is also requesting comment on whether certain…
In a move that took some by surprise, SEC Chairman Jay Clayton on Tuesday rejected requests from the SROs to delay the implementation of the Consolidated Audit Trail (“CAT”), despite the SROs’ cybersecurity concerns and indications that the CAT is not yet operationally ready.  Thus, the first phase of CAT reporting technically went into effect on Wednesday. The exemptive request submitted by the SROs sought a one-year delay of the first phase of data reporting…
The Treasury Department’s recent report on capital markets regulation includes a robust discussion of equity market structure issues.  The report does not break new ground or raise issues that have not been debated previously at length, including by the SEC’s Equity Market Structure Advisory Committee (“EMSAC”).  That said, the report adds the Treasury’s influential voice to the dialogue, and may further spur the SEC to take action on some issues.  Reflecting the difficulty of reaching…
The U.S. Treasury’s new Capital Markets Report recommends additional administrative requirements for regulatory actions by the SEC and the CFTC (the “Agencies”).  If adopted, the process by which the Agencies issue new regulations and guidance may be more transparent and subjected to more rigorous cost-benefit analysis.  Rulemaking and issuing no-action relief would almost certainly be much slower and bureaucracy laden, however, which could make the Agencies less nimble and slower to respond to changing market…
In the wake of a highly-publicized cybersecurity breach involving the SEC’s EDGAR system, SEC Chairman Jay Clayton has been in the hot seat at recent congressional hearings, fielding pointed questions as to whether the SEC should delay implementation of the Consolidated Audit Trail (“CAT”).  The SEC has not announced a delay, although Clayton indicated he may be willing to modify its implementation. On September 26 and October 4, Clayton testified before the Senate Banking Committee…
On September 27, 2017, Congress passed the Fair Access to Investment Research Act of 2017 (the “FAIR Act”), sending the bill to President Trump for his signature.  The FAIR Act instructs the SEC to amend its rules to ease various restrictions and burdens that broker-dealers face when issuing research reports on exchange-traded funds or certain other investment company securities.  The FAIR Act requires the SEC, with respect to research on these investment funds, to (i)…