Forward Industries Proposes Three-Tier Vault Regulatory Framework in Response to SEC Statement

Forward Industries said its general counsel, Georgia Quinn, responded to SEC Commissioner Hester Peirce’s July 22, 2026 statement, "Headstands and Summervaults," with a proposed three-tier regulatory framework for vaults centered on the degree of management discretion. According to ChainCatcher, the framework divides vaults into Type I Use, where developers provide ready-to-use software and users configure parameters themselves without registration; Type II Follow, modeled on the SEC’s 2013 AngelList no-action letter and requiring conditions such as co-investment and disclosures without investment adviser registration; and Type III Advised, which involves active management and would require registration or an exemption, with joint SEC and CFTC oversight suggested to avoid overlapping compliance obligations. The proposal also sets five baseline requirements for all vaults: conflict-of-interest disclosure, public code audits, exclusion of disqualified persons, application of anti-fraud rules, and state law preemption. It said Peirce’s statement did not mention the CFTC and argued that cross-agency oversight of mixed-asset vaults still needs to be resolved by the SEC and CFTC.