FiSolve Weekly News Digest: August 14, 2026

Here is what we are reading in the news this week...

SEC Staff Grants No-Action Relief for Franklin Templeton’s Blockchain-Based Money Market Fund Custody Structure

In a no-action letter, the SEC Division of Investment Management (“Staff”) stated that it would not recommend enforcement action if Franklin Templeton’s affiliated registered funds invest in shares of the Franklin OnChain U.S. Government Money Fund through a blockchain-enabled custody and recordkeeping structure without complying with certain provisions of Rule 17f-2 that were designed for physically certificated securities. The Staff concluded that although the fund uses blockchain technology and digital wallets, Franklin Templeton Investor Services (FTIS), as transfer agent, retains control over the official shareholder records, maintains the ability to correct errors and unauthorized transactions, and provides custody protections substantially comparable to those underlying the rule. The relief is conditioned on a range of safeguards, including board oversight, segregated records and wallets, strong authentication controls, transaction confirmations, daily reconciliations, transfer-agent succession procedures, and periodic independent audits. The letter appears to signal the SEC staff’s willingness to accommodate tokenized fund structures within the existing regulatory framework when traditional investor-protection, custody, and recordkeeping controls remain intact. Read more here.

DOJ’s National Fraud Enforcement Division Signals Expanded, Data-Driven Fraud Enforcement

In an August 13, 2026, memorandum, Assistant Attorney General Colin M. McDonald of the U.S. Department of Justice outlined the National Fraud Enforcement Division's strategy to significantly expand and modernize federal fraud enforcement through increased staffing, advanced data analytics, cross-agency coordination, and specialized enforcement units. The Division identified five principal enforcement priorities including corporate misconduct. The emphasis in this area will be on holding companies accountable while encouraging voluntary self-disclosure, cooperation, and remediation. The memorandum notes the Fraud Division has a strong pipeline of ongoing corporate matters. It also emphasizes a "whole-of-government" approach to combating fraud, describes plans to grow the Division to approximately 500 attorneys and staff, and states that enforcement resources will be concentrated on high-impact frauds that threaten the health, safety, security, and economic prosperity of Americans, particularly vulnerable populations. Read more here.

Financial Services Firms Race to

Close the AI Workforce Gap

PwC’s 2026 Financial Services Workforce AI Survey finds that financial institutions are aggressively investing in artificial intelligence (“AI”) but are often underprepared for the workforce transformation it will require for proper implementation. While nearly 80% of executives expect their workforce to shrink by at least 20% over the next five years, many firms have focused more on reducing headcount than redesigning jobs, workflows, talent pipelines, and leadership development for an AI-enabled future. The study shows strong demand for AI talent, with firms increasing compensation for AI-skilled employees, expanding upskilling efforts, and viewing AI training as increasingly valuable for new hires. At the same time, leaders report pressure to move faster on AI adoption while managing growing governance, compliance, and regulatory risks associated with shadow AI and more autonomous AI systems. PwC concludes that organizations that proactively redesign work, develop AI-fluent talent, and strengthen governance will be better positioned to capture long-term value from AI. Read more here.

SEC Charges Public Company and Officers in Alleged Fraudulent Scheme to Overstate Revenue

The U.S. Securities and Exchange Commission filed charges against a publicly traded company and several of its executives allegedly carried out a scheme from 2021 through early 2024 to artificially inflate reported revenue by nearly $14 million through sham consulting agreements with purported startup clients that were allegedly controlled by an insider. The SEC alleges that many of the agreements were backdated or forged, generated no legitimate revenue, and caused the company to overstate revenue by approximately 345%, with the inflated figures appearing in SEC filings and investor offering materials. The complaint further alleges that these misstatements helped the company raise more than $25 million from investors through public and private securities offerings, while senior officers and other participants approved, recorded, certified, or facilitated the transactions and related disclosures despite the underlying arrangements lacking economic substance. Read more here.

CFTC Releases Advisory on Self-Certification of Incentive Programs for Prediction Markets

The Commodity Futures Trading Commission’s Division of Market Oversight issued an advisory reminding designated contract markets of their regulatory obligations when submitting self-certifications for market-maker, liquidity, trading, or incentive programs under CFTC Regulations 40.5 and 40.6. This advisory addresses concerns regarding an increasing number of incentive‑program rule filings submitted under CFTC Regulation 40.6(a)—particularly those relating to event contract products—that contain procedural or substantive deficiencies. The Advisory notes such deficiencies can impede staff’s ability to evaluate whether DCMs have provided adequate notice of program terms and have sufficiently assessed compliance with core principles and other CFTC requirements. The guidance outlines staff expectations regarding both procedural and substantive content for submissions. Read more here.

FINRA Sanctions Representative for

Unapproved Private Securities Transactions

FINRA accepted a settlement in which a formerly registered representative was found to have participated in a private securities offering outside the scope of his member firm's business without providing the prior written notice required under FINRA rules. Between April and August 2024, the individual helped facilitate an offering of promissory notes for a private investment fund, including assisting with offering documents, investor outreach, and execution of transaction documents. The offering raised at least $8 million from 18 accredited investors, many of whom were customers of the representative's member firm. Although no commissions were received, FINRA determined that the activities constituted private securities transactions requiring advance disclosure to the firm. As a result, FINRA found violations of Rules 3280 and 2010 and imposed a 10 month suspension from association with any FINRA member firm in all capacities, along with a $10,000 fine. Read more here.

FCA Expands Scale-up Unit to Help High-Growth Fintechs Navigate Regulation and Accelerate Growth

The Financial Conduct Authority (FCA) announced that five fast-growing firms have joined its Scale-up Unit, a program designed to provide tailored regulatory support to innovative firms as they expand. The initiative aims to help rapidly growing companies navigate regulatory requirements, launch new products, respond to policy developments, and manage the operational challenges associated with scaling. The FCA said lessons from a pilot involving 15 high-growth firms demonstrated that early investment in governance, risk management, and internal controls is critical to sustainable growth. The Scale-up Unit forms part of the FCA's broader strategy to support innovation and competitiveness in the UK financial services sector, building on existing programs that have assisted more than 1,000 firms. The announcement reflects the FCA's view that proactive regulatory engagement can help ambitious fintech and financial services firms scale responsibly while contributing to economic growth and innovation in the UK. Learn more about the unit here.

💡FiSolve's Negotiation Tip of the Week💡

Diffusing Anger

When emotions run high, resist the instinct to counter facts with more facts. Anger is often driven by a perceived lack of control, respect, or understanding, and those concerns must be addressed before productive problem-solving can begin. A highly effective executive technique is to acknowledge the other party's perspective without conceding your position: "I can see why this situation is frustrating given the pressures you're facing." This simple statement lowers defensiveness, demonstrates respect, and creates the psychological space needed for rational discussion. In regulatory, compliance, and business negotiations, executives who slow the conversation, validate concerns, and ask thoughtful questions before responding are far more likely to de-escalate conflict and preserve relationships while still advancing their objectives.

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