Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), is about to step down. On November 14, 2024, he delivered a speech that may be his last public address during his tenure. In this address at the 56th Annual Securities Regulation Forum hosted by the 'Institute for Practical Law', Gensler reviewed the SEC's major achievements during his tenure and shared his views on cryptocurrency, market regulation, and future challenges.
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Reflecting on 90 Years of Capital Market Achievements
Gensler began by highlighting the importance of the Securities Act signed by President Franklin D. Roosevelt in 1933 in the success of the U.S. economy. He noted that the effective enforcement of these laws has strengthened the trust of investors and issuers in the market, reduced transaction costs and risks, and laid the foundation for today's U.S. capital market, which exceeds $120 trillion, accounting for 40% of the global market, becoming an important cornerstone supporting the dollar's global dominance.
Gensler vividly compared the Securities Act to 'traffic rules'—just as driving requires adherence to traffic lights and speed limits, common-sense norms in the market can also reduce risks, enhance trust, and thereby promote economic activity.
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Regulatory Reforms of Major Capital Markets
In his speech, Gensler detailed the SEC's regulatory achievements in areas such as government bonds, stocks, and corporate governance:
Government Bond Market: As the cornerstone of the capital market, the $28 trillion U.S. government bond market is crucial for national financial operations and the status of the dollar. To reduce costs and risks, the SEC has promoted centralized clearing in the bond market, which will further enhance market transparency and efficiency.
Stock Market: Gensler pointed out that the $60 trillion U.S. stock market, while highly liquid, has not had a comprehensive rule update for nearly 20 years. He mentioned that the SEC successfully shortened the settlement cycle and updated rules for broker execution quality disclosure, enabling ordinary investors to participate in the market at lower costs and greater efficiency.
Corporate Governance: The SEC has implemented a series of rules, including disclosure requirements for executive compensation and company performance, and restrictions on insider trading, which further solidify the market's transparency and credibility.
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Challenges and Future of Cryptocurrency
As one of the highlights of his speech, Gensler mentioned the cryptocurrency market. Since he took office, the SEC has taken up to 80 enforcement actions against non-compliance in the crypto market, including the Ripple case. He emphasized, 'While Bitcoin is not considered a security, many of the other approximately 10,000 digital assets have been ruled as securities and must comply with SEC regulatory rules.'
Gensler pointed out that while the crypto market has innovative potential, most digital assets have yet to prove their sustainable use cases. Furthermore, he criticized some participants for attempting to evade common-sense regulatory rules, emphasizing that this not only harms investor interests but also undermines market trust.
He also mentioned that earlier this year, the SEC approved ETFs for physical Bitcoin and Ethereum, which provide investors with greater transparency and security compared to the unregulated crypto market.
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Tribute to the SEC Team
At the end of his speech, Gensler expressed deep respect for the SEC team. He praised these experts in law, accounting, economics, and other fields for choosing to serve the public rather than seeking higher salaries in the private sector. He believes it is the efforts of these individuals that keep the U.S. capital markets at the forefront of the world.
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Finally
In this farewell speech, Gensler reviewed the SEC's regulatory history over the past 90 years and offered his insights on future market challenges. He stated that the SEC's core mission—to protect investors and promote market trust—will continue to support the prosperity and innovation of the U.S. economy.
He concluded by saying, 'Effective regulation not only protects investors but also builds market trust, promotes innovation, and prosperity. I am immensely proud to have been able to work with my colleagues at the SEC to uphold this mission.'
