A new administration as well as new leaders at the helm of regulatory agencies and congressional committees sets up a slew ofactivity for advisors and broker-dealersto watch in the new year.
Republican SEC Commissioner
Hester Peirce pointed out in early March
at the Investment Adviser Association’s
virtual compliance conference, that
President Joe Biden’s pick to be the new
SEC chair, Gary Gensler, “will come in
and will be thinking about the agenda he
wants to set and where priorities fall.”
During Gensler’s nomination hearing
before the Senate Banking Committee
on March 2, Senators’ questions seemed
to indicate his first priority should be
addressing the Reddit GameStop short
squeeze. The agency’s controversial
Regulation Best Interest and its accom-
panying advice standards package,
including Form CRS, were not discussed.
Gensler — a former chair of theCommodity Futures Trading Commissionwho’s a professor of blockchain, digitalcurrency, financial technology and public policy at the Massachusetts Instituteof Technology — laid out to the senators the steps he’d mull to address therecent market volatility related to theGameStop Reddit squeeze.
He also addressed his approach to
regulating cryptocurrencies. Gensler
told the senators, these products “have
brought new thinking to payments and
financial inclusion, but they’ve also
raised new issues of investor protection
that we still need to attend to.”
If confirmed, Gensler said he’d “work
with fellow commissioners to both pro-
mote the new innovation but also at the
core, ensure for investor protection.”
In Peirce’s mind, the SEC should
“wait” before making “major changes”
to Reg BI and the advice standards pack-
age, she opined during the IAA event.
The SEC “should always be open torethinking rules; that’s never a territory we shouldn’t be willing to enter,”Peirce said.
At the same time, Reg BI and the
ADMINISTRATION AND THE HILL
standards of conduct package is “a very
new rule set; there was a lot of work
done during the implementation. … It
makes sense to me to see how this
all plays out and then if we conclude
there’s things that needs to be changed
or clarified or eliminated … then we can
come back to do that.”
A new SEC chair, Peirce continued,
also will “want to see how [the pack-
age] plays out.” Reg BI “gives [the SEC]
new abilities to bring cases that would
have been harder to bring in the past.
So I’m optimistic.”
As to Form CRS, Peirce conceded that
“it is so dense, and some of them are not
very inviting to read.” Often, she said,
a “non-paper based digital message” is
more effective. “It’s hard to get all this
information into such a short form … I’m
open to reconsideration on Form CRS.”
Sen. Sherrod Brown, D-Ohio, taking thehelm as the new chairman of the SenateBanking Committee means “much morelegislative activity” coming out of thatcommittee than there was under former Republican Chairman Mike Crapo,R-Idaho, Neil Simon, vice president ofgovernment affairs for IAA, said during the group’s virtual compliance event.House Financial Services Committee bills“went to die” under Crapo, Simon said.
THE PLAYING FIELD
By Melanie Waddell
Legislative, Regulatory Maneuvers in Play
New leaders, along with new regulations and exam priorities, give advisors
and broker-dealers a lot to review.
[SEC Chair nomineeGary] Genslertold the senators,cryptocurrencies“have brought newthinking to paymentsand financialinclusion, but they’vealso raised new issuesof investor protectionthat we still need toattend to.”