Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC), speaks during a Senate Banking Committee hearing in Washington, DC, the United States, Tuesday, July 30, 2013.

Andrew Harrer | Bloomberg | Getty Images

Securities and Exchange Commission Chairman Gary Gensler said he would aggressively pursue bad financial players who “were playing with the savings of working families.”

Gensler made his remarks at a Financial Sector Regulatory Authority conference with Robert Cook, President and CEO of FINRA. FINRA is the agency that regulates brokers and stock exchanges.

As he did in his recent testimony to Congress, Gensler stressed that law enforcement would be a key part of protecting the public.

“At the SEC, our focus is on prosecuting wrongdoing wherever we find them in the financial system. This means that individuals and businesses are held to account, without fear or favor, in the approximately $ 100 trillion financial markets that we oversee, ”he said.

“We need to do whatever we can to make sure that the bad actors don’t play with the savings of working families and that the rules are enforced aggressively and consistently,” he told Cook.

Gensler’s priorities: trading gamification, market structure, improved transparency

Gensler said he would focus on three issues in particular: first, reaching out to the public about the marketing used to sell securities, in particular the “gamification” of trading, in which brokerage firms introduce game elements into securities. trading activities. “How should we refresh our set of rules, how should we think about our responsibilities to the investing public?” He asked.

Second, a focus on market structure issues, in particular “payment for order flow”, in which brokers pay market makers for their order flow. This became a problem for recent ratings on GameStop, Reddit and Robinhood. The problem is, “How do we make sure our market remains the best in the world – fair, tidy and efficient?” he said.

Third, Gensler said the SEC would focus on “transparency-enhancing initiatives” around short-selling, stock lending and securities swap rules.

More information on climate change, diversity

He also said the SEC would move forward on environmental, social and governance (ESG) issues, requesting more information from companies on their climate and diversity policies. “The heart of our securities law is disclosure … in the 2020s that means we are updating our disclosure rule regarding climate change, human capital and other initiatives,” he said. declared.

Crypto exchanges need more regulation

Gensler said Congress may want to influence the regulation of crypto exchanges, noting that for Bitcoin exchanges “there is no authority to register and write rules to protect the investing public. The investing public would benefit from. more regulation “around crypto exchanges.

Gensler warns financial community to “take a step back”

In what has become an enduring theme, Gensler urged the nearly 1,700 listening professionals to be motivated by an interest in protecting the investing public.

“So if you’re asking a lawyer, accountant, or advisor if something’s wrong, maybe it’s time to take a step back,” Gensler said. “Remember that going to the edge of a rule or looking for ambiguity in the text or footnote may not be in accordance with the law and its purpose.”

Gensler recently told a congressional subcommittee that he would review recent issues surrounding GameStop, Reddit, and Robinhood and likely release a report this summer.



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