Forward Industries said in a public letter that its general counsel, Georgia Quinn, has formally responded to SEC Commissioner Hester Peirce’s statement, "Headstands and Summervaults," published on July 22, 2026. In that response, Quinn proposed a three-tier regulatory framework for vaults built around a single core variable: the degree of managerial discretion.
The framework splits vaults into Type I - Use, where developers provide ready-to-use software and users set their own parameters; Type II - Follow, modeled on the SEC’s 2013 AngelList no-action letter and allowing others to follow a strategy under conditions such as co-investment and disclosure; and Type III - Advised, which involves active management and would require registration or an exemption. For the third category, the letter calls for joint oversight by the SEC and the Commodity Futures Trading Commission, or CFTC, to avoid overlapping compliance obligations.
The letter also sets out five baseline requirements for all vaults: conflict-of-interest disclosure, public code audits, exclusion of disqualified persons, application of anti-fraud rules, and federal preemption of state law. It also says Peirce’s statement did not mention the CFTC and argues that cross-agency oversight of mixed-asset vaults remains an unresolved issue.
Forward Industries (NASDAQ: $FWDI), in a public letter, said General Counsel Georgia Quinn has formally responded to SEC Commissioner Hester Peirce’s July 22, 2026 statement, "Headstands and Summervaults," and proposed a three-tier regulatory framework for vaults built around what it described as the degree of managerial discretion.
A three-part framework for vaults
The letter divides vaults into three categories.
- Type I - Use: Developers provide ready-to-use software, while users configure parameters on their own. No registration would be required.
- Type II - Follow: Drawing on the SEC’s 2013 AngelList no-action letter, an Angel sets a strategy for others to follow. This structure would need to satisfy conditions including co-investment and disclosure, and would not require registration as an investment adviser.
- Type III - Advised: This category involves active management and would require registration or an available exemption. The letter says the SEC and the Commodity Futures Trading Commission should regulate this area jointly to avoid conflicts created by dual compliance obligations.
Baseline rules across all vaults
The article also proposes five baseline requirements for all vaults: disclosure of conflicts of interest, public code audits, exclusion of disqualified persons, application of anti-fraud rules, and preemption of state law.
Unresolved SEC-CFTC overlap
It also specifically notes that Peirce’s statement did not mention the CFTC, and says cross-agency regulation of mixed-asset vaults is an issue the SEC and CFTC still need to address.
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