funding platforms, though my daughterswould’ve had to set up his account and doall his marketing for him,” Gensler said.
“The third part of the SEC’s mission —‘facilitate capital formation’ — doesn’t pickwinners and losers,” he continued.
“All companies, from small businessesto high-growth startups to corporations,deserve access to our capital marketsto fund their entrepreneurial ideas andinnovations, regardless of their race,gender, geography, or any other factor,”Gensler said.
“As a society, we still have a lot ofwork to do to correct unequal accessto capital for underrepresented groups.”
IMPACT OF RULEMAKING
ON MINORITY GROUPS
Indeed, SEC Commissioner
Allison Herren Lee,
a Democrat, stated in
the meeting that the
Commission “needs to
confront how we go about
assessing the effects of our
rulemaking on these com-
munities. Are there likely
to be disproportionate costs to certain
segments of our population from our
policymaking? How can we best ensure
that the benefits of our rules will indeed
flow through to these communities?”
She added: “If we do undertake spe-
cific policy initiatives, for instance, to
increase access to capital for women-
and minority-owned businesses, how do
we analyze whether our policy choices
will have the intended effect?”
Noting her previous comments about
the steps the SEC should take to “bet-
ter incorporate diversity considerations
into its policymaking,” Lee added that
the first “is incorporating our Office of
Minority and Women Inclusion into our
rulemaking process to help ensure that
we’re leveraging all of our expertise on
The second: incorporate into the SEC’s
economic analysis “an assessment of the
costs and benefits of our rules on differ-
ent segments of the population, Lee said.
FINRA SEEKS FEEDBACK ONDIVERSITY, INCLUSION BARRIERSThe Financial Industry RegulatoryAuthority wants broker-dealers to weighin by June 28 on FINRA rules, operationsand administrative processes that maycreate “unintended barriers to greaterdiversity and inclusion” in the industryor that might have “unintended disparateimpacts” on those within the industry.
In Regulatory Notice 21-17, FINRAasks broker-dealers to provide feedback
on five areas of its rules or market practices that could impact the BD industryon the basis of national origin, language,age, gender, race, color, ethnicity, socioeconomic status, religion or spiritualpractice, disability, sexual orientation,gender identity, family structure or veteran status or discourage participationin the industry.
One question requests feedback onwhether the current collection andpublication of registered representativebackground data, including that whichrelates to education, employment status,tenure, and complaints and grievances,create an unintended barrier to greaterdiversity in the industry.
MORE CHANGES UNDER GENSLER
Peirce noted during a separate speech
recently that she’s anxiously awaiting
Gensler setting out his priorities for
the coming months.
“Market events, of course, will dictate
some of the agenda,” Peirce stated.
She added that the SEC staff is work-
ing on a report about the events “related
to meme stock trading earlier this year,
and some regulatory initiatives may
come out of that work.”
Gensler testified on May 6 during the
House Financial Services Committee
third hearing on market volatility relat-
ed to the GameStop trading incident.
Peirce also said that as the agency
understands more about the failure
of Archegos Capital Management,
“discussion about regu-
latory changes might be
She opined that “com-
mentators have gotten a
head start and have identi-
fied a number of regulatory
responses, including pos-
sible regulation of family
offices and enhanced dis-
closure requirements for
synthetic stock positions
created through the use of
total return swaps and pos-
sibly other derivative instruments.”
Preventing family offices “from los-
ing their fortunes is not in the category
of problems that the SEC needs to step
in to solve,” Peirce stated. “I am much
more interested in expanding access to
our capital markets so that less well-
heeled families can build their fortunes.”
Financial regulators, she added, “dohave a legitimate interest in risk management at regulated entities, and itmay be worth exploring whether therewere problems in this area that need tobe addressed. But even here, such eventsinevitably serve as lessons for risk managers (underscored by the demotionsand firings that followed the Archegosfailure), but they need not serve as justifications for more regulation.”
Washington Bureau Chief Melanie Waddell canbe reached at firstname.lastname@example.org.
“If we do undertake specific policy
initiatives, for instance, to increase
access to capital for women- and
minority-owned businesses, how
do we analyze whether our policy
choices will have the intended effect?”
— SEC Commissioner Allison Herren Lee