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SEC Considering 50 Rule Changes: “One of the largest regulatory agendas in years”

CNBC | Bob Pisani | Feb 4, 2022

gary gensler2 - SEC Considering 50 Rule Changes:  "One of the largest regulatory agendas in years"The Securities and Exchange Commission has roughly 50 proposed rule changes it is considering, and a handful that are in a final regulatory stage and could be adopted soon.

Amy Lynch, president of Frontline Compliance and a former SEC compliance official, told me:

“This is one of the largest regulatory agendas we have seen from the SEC in many years.”

While the list of proposed rules changes is large, they can be loosely grouped into several “buckets”:  proposals of an environmental, social and government (ESG) type; buybacks; insider trading and executive compensation; trading activities; and investor protection.

Focus on Crypto

While there are no explicit proposals on cryptocurrency, Gensler and his staff will be very active deciding what comes under their jurisdiction. The SEC chairman has refused to approve a pure-play bitcoin ETF on the grounds bitcoin is subject to fraud and manipulation, and has also made it clear he believes Congress should clarify the regulatory regime around the crypto space.  But Congress is unlikely to pass any legislation.

See:  Top Crypto Lawyer says Don’t wait for the SEC

Thomas Gorman, an attorney with Dorsey Whitney who held key positions at the SEC for many years, told me:

“In the absence of new regulation, Gensler can continue to define what is a registered security, which will determine whether the SEC has jurisdiction over coins, crypto exchanges or other parts of the crypto universe.”

He noted the SEC will likely claim that certain crypto investments and platforms meet the definition of a security under existing law and will seek to force them to register with the SEC.

Disclosure is a main theme

At the heart of many of Gensler’s proposed rules is disclosure,  lots of it.

Few argue against disclosure, but the issue revolves around how much is necessary and how it is used.

See:  Canadian securities regulators publish guidance on ESG-related investment fund disclosure

One SEC watcher, who asked to remain anonymous, told me:

“The point of disclosure is, do people have enough information to make an informed decision?”

Referring to the PFOF controversy, this source told me, “The point is not to regulate the pricing of the products. If there are hidden fees, they should be disclosed, but the point should not be, ’You guys are making too much money, and we should do disclosure so you can make less money.”

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