SEC chairman will testify on cryptocurrencies and other hot issues.


Gary Gensler, chairman of the Securities and Exchange Commission, will testify before the Senate Banking Committee on Tuesday after five months of work. Based on his prepared remarks, he will advocate for additional resources to achieve a larger agenda than many of his predecessors on the committee.

Since his confirmation, Gensler’s public statements have sparked much debate, many headlines and more than a few market moves, the DealBook newsletter reports. Here’s what to expect on Tuesday on some burning issues:

Mr. Gensler wants to “freshen up” the rules. To promote efficiency and competition, it examines structural issues, such as if there is too much concentration among market makers, and conflicts of interest, such as those resulting from payment for order flows. Speeding up deal settlements, which now take about two business days, is also a goal he notes in his remarks, and one that Republican senators want him to pursue, a committee aide said.

When it comes to cryptocurrencies, buyers are wary. Mr Gensler will say that the new digital currency markets are like an era before securities laws: He wants more investor protection in crypto-finance, issuance, trading and lending.

Massachusetts Senator Elizabeth Warren, who has spoken openly about regulatory gaps in the crypto industry, will address those concerns, an aide said. Wyoming Republican Senator Cynthia Lummis will also lobby Gensler for regulation, but with an emphasis that reflects her support for the crypto industry. “We need to have a balanced legal framework for digital assets that enables innovation and protects consumers,” she told DealBook in a statement.

More mandatory disclosures on climate risk, human capital and cybersecurity are underway. Perhaps sensing the resistance he will face on this issue, Gensler will note that “these proposals will be informed by economic analysis and be subject to public comment, so that we can have a solid public debate,” according to his prepare. Remarks. Pennsylvania Republican and ranking committee member Patrick Toomey has already pushed back further disclosures on environmental, social and governance issues, and he will likely repeat those criticisms at the hearing.

Other priorities include greater transparency on after-sales service, China, and insider information. The rise in ad hoc acquisition companies that allow companies to go public with fewer rules than traditional IPOs is worrying, Gensler said, because of the conflicts of interest he considers “inherent. To structures.

He also wants the risks of Chinese companies listed on the US stock exchanges to be more apparent. And he will discuss efforts to “modernize” a rule known as 10b5-1 on executive sales of shares, which helps isolate insiders from accusations of trading on non-public information.

At the hearing, Gensler will seek advice from senators on what his priorities should be. How well he can move his plans forward might depend, in part, if lawmakers give him more authority and resources.

Like Mr. Gensler, Sherrod Brown, Democrat of Ohio and chairman of the committee, wants greater transparency and tighter investor protections. According to his prepared remarks, Brown will open the hearing by stating that “the disconnect between the stock market and the lives of most Americans has never been so painfully clear,” and that, whatever the economic circumstances, “The hedge funds, the PSPC sponsors, the big banks, the brokers, the big guys seem to be doing very well.


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