NOT.ARY GENSLER’S Student MIT Sloan was grateful. By their nomination, he won the Business School’s 2018-19 “Excellent Teacher” award. He is currently Chairman of the Securities and Exchange Commission (SECOND), The watchdog of major US markets, its members are quite unruly. The tumultuous explosion of innovation has wreaked havoc on public finances, and Gensler must understand how and to what extent to crack down. Forget about hard-working undergraduates. It’s more like trying to run the biggest, loudest kindergarten in the world.
The movement for more adult supervision is already underway in cryptocurrencies. NOT. SECOND Recently, Coinbase, a large cryptocurrency exchange, threatened to sue if it first launched a loan product without registering it as collateral. And this week, regulators withdrew $ 539 million from three media companies accused of illegal offerings of stocks and digital assets.
Crypto believers MIT Includes those related to the use of blockchain technology. But after taking SECONDAlthough Gensler is “neutral” to technology, he finds it difficult to point out that there is nothing about investor protection and market stability. And that means tightening regulations in the crypto market by $ 2.2 trillion. That is what I told the Senate committee this week: “The era of Western pioneers … full of fraud, fraud and abuse.”
Its program goes beyond boring cryptography. It also uses specialist companies (trading apps like Robin Hood to encourage retail panthers to trade more often using “digital engagement practices”.After-sales services) Pushing back the limits of what securities law allows (first victims After-sales service-Bill Ackman’s complex plan to invest in Universal Music Group). Other targets include the types of derivatives that blew up Alkegos, family offices and the shell company structure used by many Chinese companies listed in the United States.
For anyone focused on cutting edge finance, Gensler SECOND It can have an equally important impact in more established markets. He thinks stock trading needs a review. There is too much flow to places outside the “dark” stock markets, where small investors can more easily suffer. They also believe that potential conflicts of interest, such as the “order flow payment” that brokers get to route trades to a particular market maker, can change in the short term. He wants to apply all corporate disclosures, from climate risk to how companies treat workers.
Then there are quite a few to-do lists. Policy reviews are underway in at least 50 areas. And a significant change from the days of President Donald Trump, when the Commission seemed happy to step back in implementing reforms after the financial crisis.
The obvious question is whether Gensler chews more than he can. His career, his poaching and game warden equivalents should help him. After spending 18 years at Goldman Sachs and the last 10 years as a partner, he worked for the Treasury to help establish Oxley Reform Services following the collapse of energy company Enron in 2001. As Chief of the Commodity Futures Trading Commission (CFTC), Regulating derivatives, it anticipated attacks from the massive OTC swap industry and imposed it on a more regulated platform.
Being a good communicator can also help. Gensler understands that winning the debate means turning the message into a simple analogy that most Panthers (and senators) can understand. Under him SECOND We use social media effectively. When the Coinbase boss shocked that the loan product could be classified as a security, the Commission boldly tweeted a 30-second guide to how bonds work.
Good product. But Gensler can expect more lobbying for the bureaucracy. It may also have to wage a turf war with other regulators. NOT. CFTC I want some of the stock in digital currencies. And there are politicians. Regulatory Democrats dominate parliament, but some say SECONDConsidering the patch’s record, consider any scandals uncovered by outside detectives, not regulators, from authority: Enron to Bernie Madoff. Gensler also needs more money. Its budget is $ 2 billion, less than JPMorgan Chase’s annual marketing spend. However, the increase in 2022 is only 5%. Gensler has big ambitions. His problem may be finding a fortune to achieve them.
This article was published in the print version of the Treasury and Economy section under the heading “The modest mission of the SEC”.
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