U.S. Securities and Exchange Commission Chair Gary Gensler testifies before a House Financial Services Committee oversight hearing on Capitol Hill in Washington, D.C., on Sept. 27, 2023.
Jonathan Ernst | Reuters
Securities and Exchange Commission Chairman Gary Gensler spoke this morning at the Practising Law Institute’s 56th annual conference on securities regulation.
It sounded awfully close to a farewell speech.
“It’s a remarkable agency,” Gensler said of the SEC, which he has led since April 2021.
“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.”
Gensler reviews accomplishments
Gensler offered a review of what he has accomplished.
Most notably, Gensler highlighted the many disclosure rules the SEC has enacted, including disclosure on data breaches, executive pay versus performance and additional disclosures on those seeking to control and buy more than a 5% stake in a company.
Gensler made only passing reference to his most controversial disclosure rule, on climate change, which has been challenged in court.
“Congress put in place important provisions about disclosure because information about securities creates a public good,” he said.
On market structure, Gensler noted he had put in place new rules on central clearing of Treasuries and shortening of the settlement cycle for stocks from two days to one day, and had recently passed rules that allow stocks to be quoted in increments of less than a penny.
Defense of crypto stance
Gensler offered a full-throated defense of his approach to crypto.
Gensler repeated his assertion that while bitcoin is not a security, the SEC’s focus “has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities” and are therefore subject to the SEC’s purview.
He again asserted anyone offering to sell securities needs to register, and that intermediaries such as broker-dealers, exchanges and clearinghouses also need to be registered.
He said that the failure to properly police the crypto industry had resulted in “significant investor harm” and that “the vast majority of crypto assets have yet to prove out sustainable use cases.”
Proud to serve
Gensler did not say he was resigning, but the tone was clear.
“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said at the end of his speech.