1 00:00:05,800 --> 00:00:06,520 Speaker 1: Welcome at Trillions. 2 00:00:06,519 --> 00:00:08,440 Speaker 2: I'm Joel Webber and I'm Eric Belchernas. 3 00:00:11,480 --> 00:00:15,880 Speaker 1: Eric. Today we are at the SEC interviewing a commissioner 4 00:00:15,960 --> 00:00:19,320 Speaker 1: who's been on the podcast before, Commissioner Hester Purse. I'm 5 00:00:19,320 --> 00:00:21,840 Speaker 1: really excited to talk to her because she's been a 6 00:00:21,880 --> 00:00:25,840 Speaker 1: fabulous interview twice already, and now we have a new 7 00:00:25,920 --> 00:00:28,280 Speaker 1: administration and she's got a role on it. But she's 8 00:00:28,280 --> 00:00:29,680 Speaker 1: not going to be here for that much longer. So 9 00:00:29,720 --> 00:00:31,479 Speaker 1: what are you most interested in talking to her about. 10 00:00:31,720 --> 00:00:34,760 Speaker 3: Yeah, well, for the past several years, she's been the 11 00:00:34,800 --> 00:00:38,000 Speaker 3: dissenting opinion. Well, now she's kind of in the she's 12 00:00:38,000 --> 00:00:40,919 Speaker 3: in the majority of the power position, and so I 13 00:00:40,920 --> 00:00:42,920 Speaker 3: bet she's excited and she's going to be able to 14 00:00:42,960 --> 00:00:45,159 Speaker 3: have a lot of influence. I think now, especially with 15 00:00:45,240 --> 00:00:47,760 Speaker 3: the new chairman coming in, it's probably way more aligned. 16 00:00:47,400 --> 00:00:49,600 Speaker 2: With her views. So it's Paul. It's interesting. 17 00:00:49,760 --> 00:00:52,519 Speaker 3: Just a lot of patients and now I think a 18 00:00:52,520 --> 00:00:56,200 Speaker 3: lot of their framework will be influenced by some of 19 00:00:56,240 --> 00:00:58,440 Speaker 3: the way she saw things that was in the minority 20 00:00:58,880 --> 00:01:01,880 Speaker 3: for several years. Obviously, crypto is a big one. Private assets, 21 00:01:02,440 --> 00:01:04,720 Speaker 3: the ETF share class. There's just so much. 22 00:01:04,520 --> 00:01:05,399 Speaker 2: Going on right now. 23 00:01:05,520 --> 00:01:06,840 Speaker 1: Regulation in general. 24 00:01:06,720 --> 00:01:10,399 Speaker 3: Just regulation in general. So yeah, it's it's really cool. 25 00:01:10,440 --> 00:01:11,640 Speaker 3: And by the way, you forget to mention, we're on 26 00:01:11,680 --> 00:01:12,240 Speaker 3: the tenth floor. 27 00:01:12,319 --> 00:01:13,280 Speaker 1: Tenth floor. We did it. 28 00:01:15,080 --> 00:01:16,920 Speaker 2: The commissioner, So. 29 00:01:17,560 --> 00:01:20,720 Speaker 3: If it's famous for people industry, you go, it's a 30 00:01:20,760 --> 00:01:23,839 Speaker 3: tenth tenth floor decision. So we're on the tenth floor 31 00:01:23,840 --> 00:01:24,640 Speaker 3: and it's pretty cool. 32 00:01:24,800 --> 00:01:27,640 Speaker 1: Joining us also Stacey Marie Ishmael, who's the head of 33 00:01:27,959 --> 00:01:34,640 Speaker 1: cross Assets and Crypto at Bloomberg News, this time on trillions. 34 00:01:35,840 --> 00:01:41,720 Speaker 1: SEC Commissioner Hester Perce Commissioner, Welcome back to Trillians. 35 00:01:41,800 --> 00:01:42,839 Speaker 4: It's great to be here. 36 00:01:43,280 --> 00:01:46,560 Speaker 1: Thanks for hosting us at the SEC, which is a 37 00:01:46,600 --> 00:01:49,880 Speaker 1: real privilege and treat. So we've had the privilege of 38 00:01:49,920 --> 00:01:52,640 Speaker 1: having you on Trillions. This is the third time, and 39 00:01:52,680 --> 00:01:53,960 Speaker 1: the first one was in the early days of the 40 00:01:54,000 --> 00:01:56,320 Speaker 1: pandemic and it has stuck with me that you were 41 00:01:56,320 --> 00:01:58,440 Speaker 1: baking banana bread with chocolate chip cookies at the time. 42 00:01:58,840 --> 00:02:00,840 Speaker 1: And then the next time we had on the podcast, 43 00:02:01,720 --> 00:02:03,600 Speaker 1: I asked a similar question. You said you were doing 44 00:02:03,600 --> 00:02:07,400 Speaker 1: ginger snaps, which also may have had like an internal 45 00:02:07,440 --> 00:02:09,840 Speaker 1: currency at the SEC, and I'm curious, what are you 46 00:02:09,840 --> 00:02:10,880 Speaker 1: baking now? 47 00:02:12,040 --> 00:02:14,960 Speaker 4: I'm just baking boring bread because we need to get 48 00:02:14,960 --> 00:02:15,920 Speaker 4: back to the basics. 49 00:02:16,120 --> 00:02:18,480 Speaker 1: Okay, how are the bread skills going? 50 00:02:19,680 --> 00:02:22,720 Speaker 4: I mean my bread skills. It's bread I like to eat. 51 00:02:22,919 --> 00:02:25,720 Speaker 4: Nobody else necessarily likes to eat it, except for my dad. 52 00:02:26,040 --> 00:02:30,200 Speaker 1: Okay, serve yourself first. Okay, real question on a scale 53 00:02:30,240 --> 00:02:33,400 Speaker 1: of one to ten, ten being high. How libertarian is 54 00:02:33,440 --> 00:02:34,359 Speaker 1: the SEC? Right now? 55 00:02:35,560 --> 00:02:38,639 Speaker 4: Well, I mean the SEC is a regulatory agency, so 56 00:02:38,800 --> 00:02:41,799 Speaker 4: I think we're governed by our statute as opposed to 57 00:02:41,840 --> 00:02:48,520 Speaker 4: by a philosophy like libertarian thinking. So I mean I 58 00:02:48,560 --> 00:02:50,680 Speaker 4: think I can't put it on a scale. 59 00:02:51,440 --> 00:02:53,560 Speaker 1: Is it a how big of a shift do you 60 00:02:53,560 --> 00:02:54,240 Speaker 1: feel it is? 61 00:02:54,280 --> 00:02:56,359 Speaker 4: Well, I mean to get to your question, So first 62 00:02:56,400 --> 00:02:58,280 Speaker 4: of all, let me give you my disclaimer, because I 63 00:02:58,280 --> 00:03:00,040 Speaker 4: think it is important here. My views are my my 64 00:03:00,080 --> 00:03:02,320 Speaker 4: own views as a commissioner, not necessarily those of the 65 00:03:02,400 --> 00:03:05,280 Speaker 4: SEC or my fellow commissioners. And I mean I think 66 00:03:06,400 --> 00:03:11,400 Speaker 4: when I approach things, I'm thinking, how can we maximize 67 00:03:11,400 --> 00:03:14,040 Speaker 4: people's ability to engage in transactions that they want to 68 00:03:14,080 --> 00:03:16,680 Speaker 4: engage in in a way that's consistent with our statute, 69 00:03:17,000 --> 00:03:19,720 Speaker 4: which requires us to think about things like investor protection 70 00:03:20,919 --> 00:03:23,960 Speaker 4: and capital formation and the integrity of the marketplace, right. So, 71 00:03:25,160 --> 00:03:28,160 Speaker 4: I think we have changed in the sense, you know, 72 00:03:28,200 --> 00:03:31,240 Speaker 4: in the last one hundred or so days, in the 73 00:03:31,320 --> 00:03:35,040 Speaker 4: sense that now we're looking at things in terms of 74 00:03:35,360 --> 00:03:38,800 Speaker 4: not looking for ways in the statute or outside of 75 00:03:38,800 --> 00:03:41,240 Speaker 4: the statute to block people from doing what they want 76 00:03:41,280 --> 00:03:45,520 Speaker 4: to do, but we're looking for ways to facilitate people's 77 00:03:45,520 --> 00:03:47,960 Speaker 4: ability to do things that they want to do again 78 00:03:48,120 --> 00:03:50,240 Speaker 4: in a way that's consistent with our objectives. So I 79 00:03:50,240 --> 00:03:54,240 Speaker 4: do think there's been a pretty dramatic shift in approach. 80 00:03:54,800 --> 00:03:59,400 Speaker 5: And to that point, one of the big big areas, 81 00:03:59,600 --> 00:04:02,400 Speaker 5: or at least one of the big industries as it were, 82 00:04:02,480 --> 00:04:05,640 Speaker 5: that's been vocal with how pleased they are about that 83 00:04:05,680 --> 00:04:10,120 Speaker 5: particular shift. Are folks at the intersection of cryptodigital assets, payments, 84 00:04:10,120 --> 00:04:13,320 Speaker 5: and fintech to an extent, and what we're increasingly hearing 85 00:04:13,320 --> 00:04:17,600 Speaker 5: from them is not just we're so glad that there 86 00:04:17,640 --> 00:04:22,640 Speaker 5: are these pauses in some of the cases or withdrawals 87 00:04:22,640 --> 00:04:25,560 Speaker 5: and others, but that they're looking forward to kind of 88 00:04:25,640 --> 00:04:29,080 Speaker 5: proactive rulemaking, you know, to really get to that you know, 89 00:04:29,640 --> 00:04:34,120 Speaker 5: much vaunted phrase of regulatory clarity. What in the environment 90 00:04:34,160 --> 00:04:36,120 Speaker 5: that you're describing, where as you say you want to 91 00:04:36,240 --> 00:04:40,360 Speaker 5: enable and facilitate. Does a proactive rule making process look 92 00:04:40,480 --> 00:04:43,400 Speaker 5: like as opposed to, you know, regulation by enforcement. 93 00:04:44,320 --> 00:04:46,479 Speaker 4: Well, I think that what we're trying to do is 94 00:04:46,480 --> 00:04:49,640 Speaker 4: we're trying to use our regulatory divisions for their intended purpose, 95 00:04:49,720 --> 00:04:54,440 Speaker 4: which is to help people think through how a pretty 96 00:04:54,480 --> 00:04:59,960 Speaker 4: complex set of regulations applies in their particular facts and circumstances. 97 00:05:00,600 --> 00:05:03,320 Speaker 4: And so some of that can be done on a 98 00:05:03,360 --> 00:05:08,919 Speaker 4: guidance basis, so providing maybe generalized guidance that applies to 99 00:05:08,960 --> 00:05:13,640 Speaker 4: more than just one person or entity. Some of it 100 00:05:13,680 --> 00:05:18,440 Speaker 4: is simply saying these activities or things are not within 101 00:05:18,520 --> 00:05:23,159 Speaker 4: our purview as a securities regulator, and some of it 102 00:05:22,880 --> 00:05:28,960 Speaker 4: is thinking about very individualized no action letters. And some 103 00:05:29,000 --> 00:05:33,440 Speaker 4: of it is then thinking longer term about rulemaking. How 104 00:05:33,480 --> 00:05:37,520 Speaker 4: can we go out for notice and comment rule making, 105 00:05:37,560 --> 00:05:41,159 Speaker 4: get the public's input, and then how can we develop 106 00:05:41,279 --> 00:05:44,880 Speaker 4: longer term, more durable rules. And then part of it 107 00:05:44,920 --> 00:05:47,400 Speaker 4: is working with other regulators and with Congress to think 108 00:05:47,440 --> 00:05:55,400 Speaker 4: about the technical aspects of the legislative framework. So it's 109 00:05:55,400 --> 00:05:58,039 Speaker 4: a mix of things, but that's kind of how we're 110 00:05:58,080 --> 00:05:58,720 Speaker 4: looking at it. 111 00:05:59,120 --> 00:06:01,440 Speaker 3: We want to be basically divide this into a couple 112 00:06:01,520 --> 00:06:05,760 Speaker 3: categories privates, crypto, and then we're going to look at 113 00:06:05,760 --> 00:06:07,440 Speaker 3: some ETF share class questions. 114 00:06:07,520 --> 00:06:10,280 Speaker 2: But first privates, so private assets. 115 00:06:10,480 --> 00:06:13,760 Speaker 3: You had said on a podcast recently that you were 116 00:06:13,760 --> 00:06:16,560 Speaker 3: looking on how to allow access to private markets. You 117 00:06:16,600 --> 00:06:19,160 Speaker 3: didn't love that you had to be a credited investor. 118 00:06:19,600 --> 00:06:22,560 Speaker 3: How do you do that? The ETF industry is obviously 119 00:06:22,800 --> 00:06:26,839 Speaker 3: famous at pushing the envelope. State Street found a way 120 00:06:26,920 --> 00:06:30,279 Speaker 3: to break that fifteen percent illiquidity barrier by using Apollo 121 00:06:30,760 --> 00:06:33,440 Speaker 3: to provide a liquidity backstop, and it seemed to me 122 00:06:33,520 --> 00:06:36,920 Speaker 3: that was a groundbreaking filing in that it does show 123 00:06:36,960 --> 00:06:40,080 Speaker 3: how you can go beyond fifteen percent iliquid holdings. 124 00:06:40,680 --> 00:06:42,760 Speaker 2: And where do we go from here? 125 00:06:42,920 --> 00:06:48,160 Speaker 3: Is r ETF's the right way to get retail investors 126 00:06:48,200 --> 00:06:54,400 Speaker 3: private investments. What's your take on making this issue you know, 127 00:06:54,480 --> 00:06:56,880 Speaker 3: something that people can look forward to and what should 128 00:06:56,880 --> 00:06:57,360 Speaker 3: they expect. 129 00:06:58,120 --> 00:07:01,800 Speaker 4: Well, I think there's an openness to using the ETF 130 00:07:03,960 --> 00:07:07,960 Speaker 4: well and using the exemptive process really to allow people 131 00:07:08,000 --> 00:07:10,440 Speaker 4: to try new things that might be in an ETF 132 00:07:10,480 --> 00:07:15,000 Speaker 4: we're in some other kind of fund, but that's kind 133 00:07:15,000 --> 00:07:17,880 Speaker 4: of what we've done historically, is people could come in 134 00:07:17,920 --> 00:07:20,560 Speaker 4: for exemptive relief and then you've built on that. It's 135 00:07:20,600 --> 00:07:25,960 Speaker 4: an iterative process. Someone might see what another issuer has 136 00:07:26,040 --> 00:07:29,920 Speaker 4: done and might iterate on that slightly, and then you know, 137 00:07:29,960 --> 00:07:32,160 Speaker 4: that's how we got ETFs right. We did a lot 138 00:07:32,200 --> 00:07:35,000 Speaker 4: of these exemptive applications and then finally we decided to 139 00:07:35,000 --> 00:07:38,280 Speaker 4: do a rule. We did a rule too long, but still, 140 00:07:38,440 --> 00:07:41,720 Speaker 4: you know, through that period of years we were able 141 00:07:41,720 --> 00:07:44,800 Speaker 4: to figure out what kind of conditions were important. And 142 00:07:44,880 --> 00:07:47,880 Speaker 4: so I expect that process to continue, and I expect 143 00:07:48,680 --> 00:07:52,040 Speaker 4: and hope that we will be willing to engage very 144 00:07:52,200 --> 00:07:57,360 Speaker 4: you know, answering questions, hearing from from people what kind 145 00:07:57,400 --> 00:08:00,320 Speaker 4: of products they'd like to develop, and helping them think 146 00:08:00,360 --> 00:08:05,440 Speaker 4: through what that looks like. That's a normal function that 147 00:08:05,480 --> 00:08:09,520 Speaker 4: I think we'll be carrying out. We sometimes impose, or 148 00:08:09,560 --> 00:08:12,280 Speaker 4: the staff as sometimes I think at the behest of 149 00:08:12,320 --> 00:08:16,320 Speaker 4: the Commission imposed restrictions that really don't have a statutory basis. 150 00:08:17,200 --> 00:08:19,080 Speaker 4: If that's happened in the past, I think we should 151 00:08:19,120 --> 00:08:24,320 Speaker 4: revisit those decisions. And so there's definitely, in my view, 152 00:08:24,320 --> 00:08:27,080 Speaker 4: there should be an openness. That's just how the statute 153 00:08:27,120 --> 00:08:29,760 Speaker 4: is meant to work. I don't think that's the only 154 00:08:29,840 --> 00:08:32,800 Speaker 4: way that retail investors should be able to get access 155 00:08:33,120 --> 00:08:35,840 Speaker 4: to private investments. I do think that's a way that 156 00:08:35,960 --> 00:08:40,000 Speaker 4: many of them may want to because it's diversified access, 157 00:08:41,200 --> 00:08:44,600 Speaker 4: it's access with professional management through vehicles they're comfortable with 158 00:08:44,679 --> 00:08:48,720 Speaker 4: and used to. But again, as I said before, that 159 00:08:48,760 --> 00:08:55,800 Speaker 4: accredited investor standard as a barrier is pretty counter to 160 00:08:55,880 --> 00:08:59,160 Speaker 4: what we as Americans generally believe, which is that if 161 00:08:59,160 --> 00:09:00,960 Speaker 4: people want to put the hard work in to do 162 00:09:01,000 --> 00:09:03,960 Speaker 4: their investment research and they want to invest, they shouldn't 163 00:09:03,960 --> 00:09:05,920 Speaker 4: have to come to the Commission and say, oh, and 164 00:09:05,960 --> 00:09:10,480 Speaker 4: by the way, I'm wealthy too. That's really not very American. 165 00:09:11,080 --> 00:09:14,120 Speaker 3: So on this issue of private assets, the State Street 166 00:09:14,120 --> 00:09:17,520 Speaker 3: of Polo ETF, which is a ticker, prev it got 167 00:09:17,520 --> 00:09:20,839 Speaker 3: approved or it may have just released, there was this 168 00:09:21,240 --> 00:09:23,199 Speaker 3: a little bit of back and forth with the SEC 169 00:09:23,280 --> 00:09:24,040 Speaker 3: and State Street. 170 00:09:25,040 --> 00:09:26,640 Speaker 2: I've been doing this for twenty years. I had never 171 00:09:26,640 --> 00:09:27,640 Speaker 2: seen anything quite like it. 172 00:09:27,679 --> 00:09:32,120 Speaker 3: Where it was listed, and the day before it listed, 173 00:09:32,160 --> 00:09:35,440 Speaker 3: there was a letter from the State SEC saying there's 174 00:09:35,480 --> 00:09:38,320 Speaker 3: like five things they weren't really comfortable with, and it 175 00:09:38,400 --> 00:09:42,599 Speaker 3: talked about without resolution of staff comments, and that was 176 00:09:42,640 --> 00:09:44,000 Speaker 3: a I just wanted to ask about that. 177 00:09:44,000 --> 00:09:46,599 Speaker 2: Do you have any more information on that or what 178 00:09:47,440 --> 00:09:48,120 Speaker 2: went down there. 179 00:09:48,520 --> 00:09:51,760 Speaker 4: Well, I don't want to speak about a particular issuers 180 00:09:51,840 --> 00:09:55,000 Speaker 4: engagement with the SEC, but I think just generally, the 181 00:09:55,120 --> 00:09:59,400 Speaker 4: comment process is a very healthy process where you get 182 00:09:59,440 --> 00:10:02,120 Speaker 4: lots and back, lots of back and forth between staff 183 00:10:02,679 --> 00:10:07,160 Speaker 4: and someone who's trying to get a product filing through, 184 00:10:07,960 --> 00:10:10,880 Speaker 4: and those conversations are very important. The idea is to 185 00:10:10,960 --> 00:10:13,600 Speaker 4: get to a place where the disclosures are clear and 186 00:10:13,640 --> 00:10:17,560 Speaker 4: they clearly portray for for people who will be buying 187 00:10:17,559 --> 00:10:21,720 Speaker 4: those products what it is they're getting. And so that's 188 00:10:21,720 --> 00:10:25,560 Speaker 4: an important process and and you know it needs to 189 00:10:25,600 --> 00:10:29,480 Speaker 4: be fully carried out before products are are out there. 190 00:10:29,840 --> 00:10:32,319 Speaker 4: So I think that's just in general. You know, as 191 00:10:32,360 --> 00:10:37,640 Speaker 4: you mentioned at the outset, this particular product was something 192 00:10:37,679 --> 00:10:40,840 Speaker 4: new and so you know, it's not surprising that there 193 00:10:41,120 --> 00:10:44,360 Speaker 4: are a lot of questions. But again, that iterative process 194 00:10:44,480 --> 00:10:45,720 Speaker 4: is really important. 195 00:10:52,440 --> 00:10:53,880 Speaker 2: Okay, let's talk crypto. 196 00:10:54,679 --> 00:10:56,480 Speaker 3: We had to do that first because we thought we 197 00:10:56,480 --> 00:10:58,360 Speaker 3: would get way down in crypto for a long time, 198 00:10:58,400 --> 00:11:02,319 Speaker 3: so I can't imagine that we had Okay, so I'm 199 00:11:02,360 --> 00:11:05,600 Speaker 3: pretty obsessed to I've really it's been a very exciting 200 00:11:05,800 --> 00:11:06,360 Speaker 3: two years. 201 00:11:07,160 --> 00:11:09,440 Speaker 2: Okay, Bitcoin ETF huge race. 202 00:11:11,000 --> 00:11:13,959 Speaker 3: That's over though, and boy were they a huge hit. 203 00:11:14,080 --> 00:11:17,320 Speaker 3: I mean, biggest launch ever, very exciting. Now we've got 204 00:11:17,360 --> 00:11:20,199 Speaker 3: the spaghetti cannon, which is what Ben Jonson Morning Star 205 00:11:20,280 --> 00:11:24,600 Speaker 3: calls it, where there's now over eighty filings sitting on 206 00:11:25,000 --> 00:11:28,120 Speaker 3: maybe not your desk, but somebody's desk, and they include 207 00:11:28,160 --> 00:11:31,559 Speaker 3: everything from XRP Solana, which we call me legit all coins. 208 00:11:32,120 --> 00:11:34,960 Speaker 3: Then it goes right down to you know, things like bonk. 209 00:11:35,280 --> 00:11:37,120 Speaker 3: Half the stuff I have to google when I see 210 00:11:37,120 --> 00:11:40,720 Speaker 3: the filing, I don't totally know. And then you've got 211 00:11:40,800 --> 00:11:43,800 Speaker 3: a trump coin ETF, a Milania ETF, and then a 212 00:11:43,880 --> 00:11:46,920 Speaker 3: two X Malania ETF. I mean, they're already going so 213 00:11:47,000 --> 00:11:49,920 Speaker 3: far out there, and this is an interesting question for me. 214 00:11:50,360 --> 00:11:53,360 Speaker 3: How do you look at approving all those and if 215 00:11:53,400 --> 00:11:55,560 Speaker 3: you go to maybe what you'd think is the most 216 00:11:56,040 --> 00:11:58,959 Speaker 3: maybe volatile one, which would be like a mean Coin ETF, 217 00:11:59,040 --> 00:12:03,800 Speaker 3: like a Trumper Milana ETF. Given that's the president, how 218 00:12:03,800 --> 00:12:07,360 Speaker 3: does the SEC deal with evaluating like the investment merits 219 00:12:07,920 --> 00:12:10,800 Speaker 3: and if that one would be okay, with the rest 220 00:12:10,880 --> 00:12:14,000 Speaker 3: ipso facto be okay. Like you see, I'm trying to 221 00:12:14,040 --> 00:12:16,720 Speaker 3: I'm trying to develop a logic on how like to handicap, 222 00:12:16,800 --> 00:12:20,000 Speaker 3: how much and how soon these will be approved. 223 00:12:20,400 --> 00:12:23,040 Speaker 4: Well, I think first step in your logic should be 224 00:12:23,120 --> 00:12:25,640 Speaker 4: to remember that the SEC is not a merit regulator, 225 00:12:25,679 --> 00:12:29,600 Speaker 4: and so when something goes effective, when when something is 226 00:12:29,640 --> 00:12:31,920 Speaker 4: green lit at the SEC, it does not mean that 227 00:12:31,920 --> 00:12:35,080 Speaker 4: we're telling people this is a good investment for anyone 228 00:12:35,200 --> 00:12:37,440 Speaker 4: or for you in particular. People have to make that 229 00:12:37,480 --> 00:12:40,640 Speaker 4: decision for themselves. I mean that really does go back 230 00:12:40,720 --> 00:12:44,840 Speaker 4: to I think the first question about how the SEC 231 00:12:45,280 --> 00:12:49,000 Speaker 4: thinks philosophically, Well, we think philosophically the way Congress told 232 00:12:49,040 --> 00:12:51,239 Speaker 4: us too, which is not to be a merit regulator. 233 00:12:51,320 --> 00:12:54,000 Speaker 4: So take that out of the out of the equation. 234 00:12:55,880 --> 00:12:58,160 Speaker 4: The second thing I'd say is we have gotten lots 235 00:12:58,200 --> 00:13:02,120 Speaker 4: of filings, and I'm glad you're compiling the list. That's helpful. 236 00:13:03,200 --> 00:13:08,000 Speaker 4: So all of those filings have to go through folks 237 00:13:08,120 --> 00:13:11,280 Speaker 4: in our division of Trading and Markets. Most of these 238 00:13:11,320 --> 00:13:14,760 Speaker 4: are ETPs, I think, not ETFs, some maybe ETFs. Those 239 00:13:14,760 --> 00:13:19,559 Speaker 4: go through investment management. But we have a limited number 240 00:13:19,559 --> 00:13:21,800 Speaker 4: of people working on these, and there's just a lot 241 00:13:21,840 --> 00:13:24,760 Speaker 4: of incoming now. And so this is something that I said, 242 00:13:24,800 --> 00:13:27,520 Speaker 4: when you know early on in this journey, as I've 243 00:13:27,559 --> 00:13:32,480 Speaker 4: been calling it, toward more cryptoclarity. People have to be patient. 244 00:13:32,559 --> 00:13:34,839 Speaker 4: There's just there's a lot going on. There are a 245 00:13:34,880 --> 00:13:38,240 Speaker 4: lot of people who want things done. There there's a 246 00:13:38,320 --> 00:13:41,559 Speaker 4: real need for patients because any filing that comes in, 247 00:13:41,679 --> 00:13:43,839 Speaker 4: our staff has to check to see whether it meets 248 00:13:43,880 --> 00:13:48,880 Speaker 4: the technical requirements, and so that's part of what's going on. 249 00:13:50,080 --> 00:13:52,160 Speaker 4: And then you know, there are a lot of other 250 00:13:52,240 --> 00:13:56,079 Speaker 4: things that I have said could also complicate things. We 251 00:13:56,160 --> 00:13:59,280 Speaker 4: have some ongoing litigation we have that we're trying to 252 00:13:59,400 --> 00:14:04,240 Speaker 4: work through. We have lots of other considerations that we're 253 00:14:04,280 --> 00:14:10,040 Speaker 4: thinking about, and so you know, just be patient. Then 254 00:14:10,160 --> 00:14:14,240 Speaker 4: on some of these filings, I would say, we got 255 00:14:14,280 --> 00:14:17,200 Speaker 4: in a comment letter. We're also taking lots of comments 256 00:14:17,200 --> 00:14:20,280 Speaker 4: in our written input from the Crypto Task Force, and 257 00:14:20,560 --> 00:14:22,680 Speaker 4: one comment came in from an exchange saying, hey, you 258 00:14:22,680 --> 00:14:26,920 Speaker 4: should really think about generic listing standards on the ETP side. 259 00:14:26,960 --> 00:14:30,400 Speaker 4: And you know, that is a request that really resonates 260 00:14:30,400 --> 00:14:33,400 Speaker 4: with me too. So I think there there's a lot 261 00:14:33,400 --> 00:14:34,920 Speaker 4: of work to do and we have to think about 262 00:14:34,920 --> 00:14:36,160 Speaker 4: how to do it most efficiently. 263 00:14:36,760 --> 00:14:38,960 Speaker 3: And just one quick follow up on that, remember in 264 00:14:39,040 --> 00:14:42,520 Speaker 3: the Bitcoin ETF extravaganza. 265 00:14:42,560 --> 00:14:43,480 Speaker 2: For lack of a better word. 266 00:14:43,920 --> 00:14:46,000 Speaker 3: You they all launched in the same day. You know, we 267 00:14:46,040 --> 00:14:49,320 Speaker 3: call it the Kentucky Derby because they normally you file and. 268 00:14:49,240 --> 00:14:50,640 Speaker 2: You you're out the day. 269 00:14:51,120 --> 00:14:53,960 Speaker 3: It's staggered depending on when you filed. Are you going 270 00:14:54,040 --> 00:14:56,240 Speaker 3: to group them together, group them together again, or was 271 00:14:56,280 --> 00:14:57,960 Speaker 3: that sort of a one off that we probably won't 272 00:14:58,000 --> 00:14:58,480 Speaker 3: see again. 273 00:14:59,200 --> 00:15:01,760 Speaker 4: You know, I don't know how these filings will be done. 274 00:15:01,800 --> 00:15:03,920 Speaker 4: As you said, they're not all the same, right, But 275 00:15:04,000 --> 00:15:07,760 Speaker 4: I think one thing to remember that whole process was 276 00:15:07,880 --> 00:15:14,080 Speaker 4: terribly mismanaged, and so we had been going for ten years, 277 00:15:14,080 --> 00:15:17,840 Speaker 4: We had been getting filings and so thinking about how 278 00:15:17,840 --> 00:15:19,440 Speaker 4: to do it, and then there was so much build 279 00:15:19,520 --> 00:15:21,520 Speaker 4: up and then the court case. You know, there was 280 00:15:21,560 --> 00:15:24,040 Speaker 4: just a lot going on there. So that was a 281 00:15:24,160 --> 00:15:27,840 Speaker 4: unique set of circumstances. The second thing I'd say is 282 00:15:27,880 --> 00:15:31,080 Speaker 4: if we just said well, it's first in, first out, 283 00:15:31,960 --> 00:15:34,800 Speaker 4: then we would encourage people to put in really terrible 284 00:15:34,840 --> 00:15:38,120 Speaker 4: filings just to get first in the door. And I 285 00:15:38,200 --> 00:15:41,400 Speaker 4: really want people to know that the better the work 286 00:15:41,400 --> 00:15:44,440 Speaker 4: that you do and the lead up, the easier it 287 00:15:44,520 --> 00:15:47,760 Speaker 4: is for us to process these things. Because our staff 288 00:15:47,800 --> 00:15:50,720 Speaker 4: has to look at everything, and again, if they're technical deficiencies, 289 00:15:50,800 --> 00:15:53,120 Speaker 4: they have to tell you that. And so it really 290 00:15:53,280 --> 00:15:55,400 Speaker 4: what we really want to do is encourage people to 291 00:15:55,440 --> 00:15:58,440 Speaker 4: come in with good filings, to have good conversations with us, 292 00:15:58,840 --> 00:16:02,840 Speaker 4: and help us think through through how we can prioritize 293 00:16:03,560 --> 00:16:05,560 Speaker 4: getting through the work that we have. 294 00:16:06,560 --> 00:16:10,480 Speaker 5: I'm interested in your comment about, you know, embracing the 295 00:16:10,520 --> 00:16:15,360 Speaker 5: idea of not being a merit based regulator and from everything. 296 00:16:15,720 --> 00:16:17,160 Speaker 5: One of the things we've been hearing a lot from 297 00:16:17,160 --> 00:16:20,120 Speaker 5: the administration is, you know, this emphasis on kind of 298 00:16:20,160 --> 00:16:24,120 Speaker 5: individual research, that people can make informed decisions based on 299 00:16:25,120 --> 00:16:28,680 Speaker 5: the processes and systems and information that's available to them. 300 00:16:29,360 --> 00:16:32,360 Speaker 5: How are you thinking about that in the context where 301 00:16:32,920 --> 00:16:35,920 Speaker 5: there is at the same time, kind of a deprioritization 302 00:16:36,000 --> 00:16:40,320 Speaker 5: in some agencies of explicit investor protection in the sense 303 00:16:40,400 --> 00:16:43,160 Speaker 5: of some agencies that were more dedicated to saying, Okay, 304 00:16:43,600 --> 00:16:45,680 Speaker 5: if a bad thing did happen and you were not 305 00:16:45,760 --> 00:16:49,040 Speaker 5: at fault, there was fraud, there was something you didn't 306 00:16:49,040 --> 00:16:51,760 Speaker 5: have control over here with the systems that were able 307 00:16:51,800 --> 00:16:55,320 Speaker 5: to protect you, or here were mechanisms for whistleblowers. Do 308 00:16:55,360 --> 00:16:58,480 Speaker 5: you see any tension between these sort of forces that 309 00:16:58,520 --> 00:17:00,000 Speaker 5: we're seeing at the same time. 310 00:17:00,000 --> 00:17:01,880 Speaker 4: Well, at the start, I said, I can't speak for 311 00:17:01,920 --> 00:17:04,240 Speaker 4: the SEC. I only speak for myself, and I certainly 312 00:17:04,240 --> 00:17:06,119 Speaker 4: don't want to speak for other agencies. But what I 313 00:17:06,119 --> 00:17:08,720 Speaker 4: will say about the SEC is investor protection is one 314 00:17:08,720 --> 00:17:12,639 Speaker 4: of our core mandates and so that's something that we 315 00:17:12,680 --> 00:17:16,360 Speaker 4: will continue to emphasize here. And part of investor protection 316 00:17:16,600 --> 00:17:20,200 Speaker 4: is ensuring that people have the ability to make investment 317 00:17:20,240 --> 00:17:23,119 Speaker 4: decisions that they want to make and to make those 318 00:17:23,800 --> 00:17:26,439 Speaker 4: without having the government say no, we think that you 319 00:17:27,400 --> 00:17:30,120 Speaker 4: can't invest in this thing or you know, so it's 320 00:17:30,240 --> 00:17:34,120 Speaker 4: investment opportunity is part of investor protection. Part of investor 321 00:17:34,160 --> 00:17:41,440 Speaker 4: protection is ensuring that where there is fraud, we are 322 00:17:41,440 --> 00:17:44,040 Speaker 4: there with enforcement if you know. Of course, our role 323 00:17:44,160 --> 00:17:48,679 Speaker 4: is limited to the statutory constraints that we have and 324 00:17:48,720 --> 00:17:51,960 Speaker 4: that's where securities regulator. But if there's securities fraud, we're 325 00:17:52,560 --> 00:17:57,159 Speaker 4: definitely interested in bringing those cases. And we have a 326 00:17:57,320 --> 00:18:01,440 Speaker 4: very active whistleblower program. You can go on our website 327 00:18:01,480 --> 00:18:05,679 Speaker 4: and file what's called a TCR and you can select 328 00:18:05,960 --> 00:18:08,560 Speaker 4: to be elect to be a whistleblower, and that's very 329 00:18:08,600 --> 00:18:11,560 Speaker 4: important and will continue to be a Third piece of 330 00:18:11,600 --> 00:18:15,199 Speaker 4: investor protection is disclosure and so a lot of the 331 00:18:15,240 --> 00:18:18,560 Speaker 4: back and forth that you see with these filings in 332 00:18:18,640 --> 00:18:21,840 Speaker 4: the investment management area, for example, is ensuring that there's 333 00:18:21,880 --> 00:18:25,360 Speaker 4: adequate disclosure so that people are aware of the risks, 334 00:18:25,480 --> 00:18:27,760 Speaker 4: and that will continue to be an important part of 335 00:18:27,760 --> 00:18:31,440 Speaker 4: what we do. It's you know, it's a big chunk 336 00:18:31,480 --> 00:18:34,720 Speaker 4: of our staff works on these issues, whether it's with 337 00:18:35,080 --> 00:18:40,159 Speaker 4: investment companies or whether it's with public companies, and that 338 00:18:40,320 --> 00:18:42,760 Speaker 4: is going to continue to be an important role that 339 00:18:43,320 --> 00:18:47,360 Speaker 4: we play. So I would urge you not to look 340 00:18:47,400 --> 00:18:51,439 Speaker 4: at this from the perspective of at least you know, 341 00:18:51,480 --> 00:18:56,080 Speaker 4: as we're looking at it, it's investor protection is very central, 342 00:18:56,920 --> 00:19:00,160 Speaker 4: and I would urge you not to assume that we're 343 00:19:00,160 --> 00:19:03,760 Speaker 4: just saying no more enforcement. That is absolutely not true, 344 00:19:03,960 --> 00:19:08,760 Speaker 4: and I think people should be careful to know that 345 00:19:09,280 --> 00:19:12,399 Speaker 4: it's not anything goes, you know, we want to build 346 00:19:12,960 --> 00:19:16,199 Speaker 4: a framework that encourages an industry that is healthy and 347 00:19:16,280 --> 00:19:21,359 Speaker 4: dynamic and competitive and where people can be confident in 348 00:19:21,400 --> 00:19:22,679 Speaker 4: the disclosures they're getting. 349 00:19:23,840 --> 00:19:27,960 Speaker 1: I'm curious about the relationship between the SEC and CFTC 350 00:19:28,280 --> 00:19:31,520 Speaker 1: regarding crypto, because you've got an investor protection there. It's 351 00:19:31,560 --> 00:19:34,159 Speaker 1: not something that's the same thing between the CFTC and 352 00:19:34,200 --> 00:19:37,280 Speaker 1: the SECA so, and you have been a go between 353 00:19:37,280 --> 00:19:40,080 Speaker 1: between the two agencies. So I'm curious, like who takes 354 00:19:40,119 --> 00:19:44,080 Speaker 1: the lead in crypto and this new administration. 355 00:19:45,800 --> 00:19:48,359 Speaker 4: Well, I think what we're trying to do with the 356 00:19:48,400 --> 00:19:54,159 Speaker 4: SEC is identify where our jurisdiction begins. And so that 357 00:19:54,280 --> 00:19:58,320 Speaker 4: means that some of crypto is not in our jurisdiction, 358 00:19:59,720 --> 00:20:03,359 Speaker 4: I mean, and what means Congress has laid out a 359 00:20:03,359 --> 00:20:07,600 Speaker 4: framework and said, here's your jurisdiction, and so some of 360 00:20:07,640 --> 00:20:10,000 Speaker 4: that stuff is outside. It may be at the CFTC, 361 00:20:10,080 --> 00:20:13,440 Speaker 4: it may be at another regulator, and that's the way 362 00:20:13,480 --> 00:20:16,320 Speaker 4: it is now. But of course Congress is working on 363 00:20:16,560 --> 00:20:21,679 Speaker 4: legislation on market structure, and that would perhaps create some 364 00:20:21,760 --> 00:20:26,399 Speaker 4: new regulatory authority, maybe for the CFTC at least as 365 00:20:27,320 --> 00:20:31,399 Speaker 4: they have designed the statute, there'd be a lot of 366 00:20:31,480 --> 00:20:35,680 Speaker 4: new authority for the CFTC. And so we will be 367 00:20:36,520 --> 00:20:39,360 Speaker 4: good partners with them and try to work with them. 368 00:20:39,400 --> 00:20:41,600 Speaker 4: There may be some areas where Congress wants us to 369 00:20:41,600 --> 00:20:46,640 Speaker 4: work jointly with the CFTC explicitly, but more generally. Our 370 00:20:46,720 --> 00:20:50,040 Speaker 4: jurisdictions bump up against each other all the time, and 371 00:20:50,080 --> 00:20:54,480 Speaker 4: so we will have lots of constant contact and communication. 372 00:20:55,280 --> 00:20:58,879 Speaker 4: The new chairman coming in, Chairman quintends it's someone that 373 00:20:58,920 --> 00:21:02,720 Speaker 4: I've worked with before, someone Paul knows, Chairman Atkins know 374 00:21:02,760 --> 00:21:05,080 Speaker 4: as well, and so I think there's going to be 375 00:21:05,119 --> 00:21:09,080 Speaker 4: continued good work across agency lines. 376 00:21:10,960 --> 00:21:12,360 Speaker 2: Let's talk about tokenization. 377 00:21:12,560 --> 00:21:16,600 Speaker 3: So the more you kind of dive into crypto, one 378 00:21:16,640 --> 00:21:19,360 Speaker 3: of the areas beyond the tokens is the blockchain, right, 379 00:21:19,840 --> 00:21:24,159 Speaker 3: major technology. It's possible, so much just moves on the blockchain. Right. 380 00:21:24,200 --> 00:21:28,200 Speaker 3: They're trying to use the blockchain for the back office 381 00:21:28,560 --> 00:21:32,400 Speaker 3: of a lot of the ETF industry. And then Larry 382 00:21:32,440 --> 00:21:34,199 Speaker 3: Fink comes out and says, I want the SEC to 383 00:21:34,359 --> 00:21:38,639 Speaker 3: rapidly approve the tokenization of bonds and stocks, and so 384 00:21:38,680 --> 00:21:42,320 Speaker 3: I go to these tokenization crypto events and they all 385 00:21:42,359 --> 00:21:44,400 Speaker 3: think everything's going to be a token someday and that's 386 00:21:44,440 --> 00:21:47,680 Speaker 3: the quote endgame, and you know it. 387 00:21:47,680 --> 00:21:48,240 Speaker 2: Is a vision. 388 00:21:48,680 --> 00:21:52,119 Speaker 3: They're very excited, but they got to have the SEC 389 00:21:52,920 --> 00:21:54,320 Speaker 3: on board to pull this off. 390 00:21:54,359 --> 00:21:55,399 Speaker 2: So where do you stand on that. 391 00:21:56,240 --> 00:21:58,840 Speaker 4: We're having a roundtable next week on the topic of 392 00:21:58,880 --> 00:22:01,520 Speaker 4: tokenization and we'll see what people have to say there. 393 00:22:01,560 --> 00:22:04,600 Speaker 4: It's one of the topics that we've gotten a lot 394 00:22:04,640 --> 00:22:09,000 Speaker 4: of interest in sort of after this, you know, announcement 395 00:22:09,040 --> 00:22:13,040 Speaker 4: that we're open to thinking about things in new ways. 396 00:22:13,480 --> 00:22:16,240 Speaker 4: So we'll see what comes out of that roundtable and 397 00:22:16,280 --> 00:22:18,159 Speaker 4: what comes out of the We've been getting again a 398 00:22:18,160 --> 00:22:22,639 Speaker 4: lot of written input, and I'm open to trying to 399 00:22:22,680 --> 00:22:26,760 Speaker 4: facilitate people trying this technology to see where it will fit. 400 00:22:27,320 --> 00:22:29,480 Speaker 4: I suspect what will happen is that there'll be some 401 00:22:29,600 --> 00:22:32,520 Speaker 4: places where people had high hopes and it will it 402 00:22:32,560 --> 00:22:35,480 Speaker 4: will those hopes will not pan out the way they 403 00:22:35,560 --> 00:22:38,399 Speaker 4: expected in other areas where they will work very well. 404 00:22:39,160 --> 00:22:42,160 Speaker 4: But that's really up for the industry and the market 405 00:22:42,640 --> 00:22:45,639 Speaker 4: market participants to figure out. But we'll certainly work with 406 00:22:45,680 --> 00:22:48,880 Speaker 4: them to facilitate their attempts to use the technology. 407 00:22:49,720 --> 00:22:51,600 Speaker 5: And building on what Eric said, I feel like when 408 00:22:51,640 --> 00:22:54,560 Speaker 5: people aren't talking about tokenization, they're talking about stable coins, 409 00:22:55,000 --> 00:22:57,240 Speaker 5: which you know, some folks will refer to as tokenized 410 00:22:57,280 --> 00:23:00,800 Speaker 5: money market funds. In a world in which which things 411 00:23:01,040 --> 00:23:06,440 Speaker 5: that look security adjacent or money adjacent or real world 412 00:23:06,440 --> 00:23:11,000 Speaker 5: asset adjacent, depending on which conference you're going to, what 413 00:23:11,080 --> 00:23:13,640 Speaker 5: are some of your priorities? Right, Like, you've just told 414 00:23:13,720 --> 00:23:15,639 Speaker 5: us that there are a limited number of people working 415 00:23:15,680 --> 00:23:19,119 Speaker 5: on quite a number of things. If you could spend 416 00:23:19,600 --> 00:23:21,640 Speaker 5: just you know, one thing a day, like, what does 417 00:23:21,640 --> 00:23:24,359 Speaker 5: that list look like? Is stable coins the thing that 418 00:23:24,400 --> 00:23:27,520 Speaker 5: the that you and your fellow commissioners are paying attention to. 419 00:23:28,160 --> 00:23:31,600 Speaker 5: Is it tokenization, is it ETFs? Is it somehow all 420 00:23:31,640 --> 00:23:34,040 Speaker 5: of the above? And how does that align with the 421 00:23:34,040 --> 00:23:36,119 Speaker 5: message to the industry that everyone needs to show a 422 00:23:36,160 --> 00:23:38,560 Speaker 5: little bit more patience than they might currently be doing. 423 00:23:39,119 --> 00:23:41,359 Speaker 4: Well. First of all, it's not just crypto. There's a 424 00:23:41,400 --> 00:23:46,040 Speaker 4: lot of other work on our agenda, so people should 425 00:23:46,280 --> 00:23:50,400 Speaker 4: remember that as well. But second, i'd say stable coins. 426 00:23:51,119 --> 00:23:55,240 Speaker 4: The staff put out a statement saying non, ye'll bearing 427 00:23:55,280 --> 00:23:59,720 Speaker 4: stable coins probably not within the SEC's jurisdiction again facts 428 00:23:59,760 --> 00:24:04,000 Speaker 4: and circumstances. But tokenized money market funds are something that 429 00:24:04,000 --> 00:24:06,159 Speaker 4: people have been working on and that's not new to 430 00:24:06,200 --> 00:24:08,040 Speaker 4: this year. People have been working on that over the 431 00:24:08,080 --> 00:24:11,680 Speaker 4: past several years, and I expect to see continued interest 432 00:24:11,880 --> 00:24:15,280 Speaker 4: in trying to think about how to do that. So 433 00:24:15,560 --> 00:24:21,880 Speaker 4: we're open to those kinds of conversations. In terms of prioritizing, 434 00:24:22,000 --> 00:24:24,560 Speaker 4: I mean, I think really the goal is just to 435 00:24:24,600 --> 00:24:27,440 Speaker 4: try to figure out how we can get some clarity. 436 00:24:27,480 --> 00:24:29,600 Speaker 4: And one of the first things we have to deal 437 00:24:29,640 --> 00:24:33,320 Speaker 4: with there is helping people understand when the securities laws apply. 438 00:24:34,359 --> 00:24:37,919 Speaker 4: So this question of security non security, I think is 439 00:24:38,720 --> 00:24:41,760 Speaker 4: continues to be a big gating factor because if it's 440 00:24:41,800 --> 00:24:45,320 Speaker 4: not a security, people don't have to think about the 441 00:24:45,359 --> 00:24:48,600 Speaker 4: whole panoply of securities laws. If it is, then then 442 00:24:48,680 --> 00:24:51,200 Speaker 4: we need people to come in and really help us 443 00:24:51,359 --> 00:24:54,520 Speaker 4: as we work through how do the laws apply to 444 00:24:54,600 --> 00:24:58,520 Speaker 4: this unique asset class, to this unique technology. And that's 445 00:24:58,520 --> 00:25:01,119 Speaker 4: something that we've done and in lots of other areas, 446 00:25:01,160 --> 00:25:03,360 Speaker 4: and we can do here. But I think that's kind 447 00:25:03,400 --> 00:25:05,600 Speaker 4: of how I'm ranking it in terms of, you know, 448 00:25:05,840 --> 00:25:09,320 Speaker 4: figuring out is it within our jurisdiction and then working 449 00:25:09,359 --> 00:25:11,080 Speaker 4: with people and figuring that out. 450 00:25:11,560 --> 00:25:13,879 Speaker 5: And do you think that's about being in more of 451 00:25:13,920 --> 00:25:16,360 Speaker 5: an affirmative posture, So you know, to your point, you've said, 452 00:25:16,440 --> 00:25:20,280 Speaker 5: these things we don't, these don't fall into our universe. 453 00:25:20,680 --> 00:25:22,359 Speaker 5: At what point do you think we'll be moving to 454 00:25:22,640 --> 00:25:24,160 Speaker 5: and these things explicitly do. 455 00:25:24,600 --> 00:25:27,960 Speaker 4: Well, I think we're already doing that. We put out 456 00:25:28,359 --> 00:25:31,720 Speaker 4: again this staff and the Division of Corporation Finance put 457 00:25:31,720 --> 00:25:36,040 Speaker 4: out some disc some disclosure guidance for companies that are 458 00:25:36,040 --> 00:25:41,320 Speaker 4: either involved with crypto or are issuing some sort of 459 00:25:41,320 --> 00:25:45,359 Speaker 4: a crypto asset that is a security uh. And so 460 00:25:45,800 --> 00:25:50,200 Speaker 4: we in that guidance that the staff gave some help 461 00:25:50,280 --> 00:25:52,439 Speaker 4: in thinking about how do you how do you apply 462 00:25:52,600 --> 00:25:56,480 Speaker 4: the traditional securities laws in this space. So I think 463 00:25:56,480 --> 00:25:59,520 Speaker 4: that's one example, and I think you'll see other examples. 464 00:25:59,560 --> 00:26:03,280 Speaker 4: We're trying to not just do one thing at a time. 465 00:26:03,359 --> 00:26:05,280 Speaker 4: We've got a lot of irons in the fire, and 466 00:26:05,320 --> 00:26:07,920 Speaker 4: so we're working on a lot of different I would 467 00:26:07,960 --> 00:26:11,120 Speaker 4: say proactive pieces as well. 468 00:26:18,000 --> 00:26:20,639 Speaker 1: I wanted to bring up another topic, which is just 469 00:26:20,760 --> 00:26:24,720 Speaker 1: financial regulation, and we're kind of in this moment now 470 00:26:24,760 --> 00:26:29,120 Speaker 1: where independent agencies are even being reviewed and the FED 471 00:26:29,160 --> 00:26:31,919 Speaker 1: has come up and sec has come up, and just curious, like, 472 00:26:32,200 --> 00:26:35,080 Speaker 1: is it independent regulatory agency a misnomer? 473 00:26:35,119 --> 00:26:39,840 Speaker 4: Now? No? I mean I think if you look at 474 00:26:40,640 --> 00:26:42,880 Speaker 4: you know, I certainly feel independent and how I think 475 00:26:42,880 --> 00:26:47,800 Speaker 4: about things. And I think that's the role of Commission 476 00:26:47,880 --> 00:26:51,320 Speaker 4: is to think independently. But I think one thing that 477 00:26:51,440 --> 00:26:55,600 Speaker 4: is positive in this environment is there's a real desire 478 00:26:55,680 --> 00:27:01,160 Speaker 4: to try to have a uniform approach to thinking about 479 00:27:01,560 --> 00:27:05,439 Speaker 4: new technologies, for example, and that means that we're not 480 00:27:06,040 --> 00:27:10,240 Speaker 4: you know, we're seeing agencies worked more closely together. We're 481 00:27:10,280 --> 00:27:12,680 Speaker 4: not seeing one agency do thing do one thing and 482 00:27:12,760 --> 00:27:15,320 Speaker 4: another agency do something that's contrary. And so I think 483 00:27:15,400 --> 00:27:21,800 Speaker 4: that kind of unified approach is really helpful. The administration 484 00:27:21,960 --> 00:27:25,600 Speaker 4: will be looking at our economic analysis as an example. 485 00:27:26,640 --> 00:27:28,760 Speaker 4: We have a lot of economists here at the SEC. 486 00:27:29,359 --> 00:27:32,280 Speaker 4: We do a lot of economic analysis. It can be 487 00:27:32,320 --> 00:27:36,560 Speaker 4: helpful to get an outside perspective from someone who has 488 00:27:36,640 --> 00:27:41,120 Speaker 4: the opportunity to look across agencies at economic analysis. So 489 00:27:41,160 --> 00:27:45,439 Speaker 4: I expect that that will be helpful to us. So, 490 00:27:46,240 --> 00:27:47,880 Speaker 4: you know, I think we've got a lot of work 491 00:27:47,920 --> 00:27:52,200 Speaker 4: to do, and we're one part of the financial regulatory infrastructure. 492 00:27:53,280 --> 00:27:57,320 Speaker 4: The US has always had a complicated landscape there with 493 00:27:57,440 --> 00:28:02,040 Speaker 4: federal regulators and state regulators. But it's good to work 494 00:28:02,080 --> 00:28:03,240 Speaker 4: together and have coordination. 495 00:28:03,960 --> 00:28:09,200 Speaker 1: I'm curious about DOGE, the Department of Government Efficiency maybe 496 00:28:09,600 --> 00:28:14,159 Speaker 1: more than a coin. What changes my DOGE bring to 497 00:28:14,200 --> 00:28:17,080 Speaker 1: the SEC now that they've sort of, you know, worked 498 00:28:17,080 --> 00:28:20,840 Speaker 1: through many many agencies and seem like they're coming to 499 00:28:21,680 --> 00:28:25,360 Speaker 1: talk with SEC next. What kind of changes my DOGE instigate? 500 00:28:26,040 --> 00:28:28,600 Speaker 4: Oh? I don't know. I mean I expect that they 501 00:28:28,640 --> 00:28:32,639 Speaker 4: will give us some thoughts around how we can gain 502 00:28:32,720 --> 00:28:36,119 Speaker 4: some more efficiencies and in some of the ways that 503 00:28:36,160 --> 00:28:39,040 Speaker 4: we do things. So I you know, I think they 504 00:28:39,040 --> 00:28:42,160 Speaker 4: could serve a sort of an external consultant kind of role. 505 00:28:43,880 --> 00:28:47,400 Speaker 3: All right, let's talk about something that's wonky but huge, okay, 506 00:28:47,440 --> 00:28:50,000 Speaker 3: which is the ETF share class situation. 507 00:28:50,760 --> 00:28:54,120 Speaker 2: So just let me sell this to people listening so 508 00:28:54,120 --> 00:28:55,000 Speaker 2: they don't fall asleep. 509 00:28:55,760 --> 00:29:00,520 Speaker 3: ETF mutual fund companies have long figured out trial been 510 00:29:01,400 --> 00:29:05,000 Speaker 3: had a problem getting into the ETF market. Now, Vanguard 511 00:29:05,000 --> 00:29:07,120 Speaker 3: had a patent that added an ETF share class to 512 00:29:07,160 --> 00:29:10,040 Speaker 3: their mutual fund share classes. That patent expired. Now there's 513 00:29:10,080 --> 00:29:13,200 Speaker 3: fifty three big fund companies. Well not of them are big, 514 00:29:13,240 --> 00:29:15,360 Speaker 3: but as a group, they're like ten trillion in assets. 515 00:29:15,880 --> 00:29:18,920 Speaker 3: They are filing to bolt on an ETF share class 516 00:29:18,920 --> 00:29:22,800 Speaker 3: to the mutual fund if that happens, and according to 517 00:29:23,200 --> 00:29:26,200 Speaker 3: a commissioner I unit this, this is a higher priority. Eleven 518 00:29:26,200 --> 00:29:29,200 Speaker 3: of them have already responded to comments and refiled, so 519 00:29:29,240 --> 00:29:31,560 Speaker 3: we're expecting this to sort of be approved this summer. 520 00:29:32,440 --> 00:29:34,640 Speaker 3: And if that happens, I mean you could be looking 521 00:29:34,680 --> 00:29:38,160 Speaker 3: at thousands of ETF share classes and potentially a whole 522 00:29:38,200 --> 00:29:40,640 Speaker 3: other tributary of flows coming into the ETF. 523 00:29:40,720 --> 00:29:42,560 Speaker 2: That's sort of where I see it. 524 00:29:42,600 --> 00:29:46,480 Speaker 3: The only snag would be how does a mutual fund 525 00:29:46,560 --> 00:29:49,720 Speaker 3: company deal with an ETF when you need a brokerage platform? 526 00:29:49,760 --> 00:29:52,040 Speaker 3: And I think that's I don't think that's your problem, 527 00:29:52,040 --> 00:29:54,360 Speaker 3: but that's something that the industry I think will have 528 00:29:54,360 --> 00:29:56,760 Speaker 3: to figure out as well if these get approved. So 529 00:29:57,200 --> 00:29:59,840 Speaker 3: where does that stand and what might we look out 530 00:29:59,840 --> 00:30:00,320 Speaker 3: for there? 531 00:30:00,760 --> 00:30:02,960 Speaker 4: Well, I think you've really outlined the issue. Well, I mean, 532 00:30:02,960 --> 00:30:04,680 Speaker 4: we have a lot of applicants. I think it's a 533 00:30:04,800 --> 00:30:08,360 Speaker 4: very interesting issue. It's something that people have been asking 534 00:30:08,400 --> 00:30:10,120 Speaker 4: us to work on for quite some time, and I'm 535 00:30:10,120 --> 00:30:14,360 Speaker 4: glad that we're really getting down to the technical details 536 00:30:14,400 --> 00:30:16,479 Speaker 4: of it now. And as you point out, there's some 537 00:30:16,520 --> 00:30:21,160 Speaker 4: operational questions that have to be answered, and so I'm 538 00:30:21,160 --> 00:30:23,600 Speaker 4: sure that industry will be working through those as we're 539 00:30:23,640 --> 00:30:26,320 Speaker 4: working through their applications. 540 00:30:26,360 --> 00:30:30,400 Speaker 5: Just as a kind of a closing thought, going into 541 00:30:31,600 --> 00:30:34,160 Speaker 5: a very interesting time in markets, a very interesting time 542 00:30:34,200 --> 00:30:36,440 Speaker 5: in crypto, very interesting time in digital assets. One of 543 00:30:36,480 --> 00:30:40,120 Speaker 5: the big criticisms that was levied at, you know, the 544 00:30:40,160 --> 00:30:45,240 Speaker 5: previous regime, was that the US was a less attractive 545 00:30:45,320 --> 00:30:50,440 Speaker 5: place for investors who were looking for certain types of environments. 546 00:30:50,520 --> 00:30:54,040 Speaker 5: And you know, at the Milligan conference we heard from 547 00:30:54,200 --> 00:30:56,400 Speaker 5: Scott Bessett saying like the US should be the top 548 00:30:56,400 --> 00:31:00,680 Speaker 5: investment destination for capital How do you see the SEC's 549 00:31:00,800 --> 00:31:05,400 Speaker 5: rule in either enabling that, supplementing it, complementing it in 550 00:31:05,440 --> 00:31:07,880 Speaker 5: one way? Like you know, if you were to give 551 00:31:08,000 --> 00:31:10,840 Speaker 5: a sort of a theory of the case of what 552 00:31:11,200 --> 00:31:13,120 Speaker 5: really is going to be different this time, what would 553 00:31:13,160 --> 00:31:15,040 Speaker 5: you say that would be well? 554 00:31:15,080 --> 00:31:18,280 Speaker 4: As an initial matter, I'd say our capital markets have 555 00:31:18,440 --> 00:31:21,479 Speaker 4: been the strongest and best, I think in the world 556 00:31:21,640 --> 00:31:25,880 Speaker 4: for a long time, and it's the US is the 557 00:31:25,880 --> 00:31:28,360 Speaker 4: place people want to come to invest, It's the place 558 00:31:28,400 --> 00:31:32,240 Speaker 4: they want to come to build their companies. And that's 559 00:31:32,320 --> 00:31:36,280 Speaker 4: one of the reasons that I was excited about being 560 00:31:36,440 --> 00:31:38,640 Speaker 4: at the Commission as a commissioner, because I think it's 561 00:31:38,640 --> 00:31:41,040 Speaker 4: such a treasure that the United States has, and it's 562 00:31:41,040 --> 00:31:44,840 Speaker 4: a treasure that we have to shepherd and continue to 563 00:31:44,880 --> 00:31:47,440 Speaker 4: care for. And that means we have to always be 564 00:31:47,480 --> 00:31:50,880 Speaker 4: thinking about modernizing our rules, making sure that they're working 565 00:31:50,880 --> 00:31:53,560 Speaker 4: the way they should, and also be thinking of ways 566 00:31:53,600 --> 00:31:57,160 Speaker 4: to encourage more people to participate in the capital markets. 567 00:31:57,680 --> 00:32:01,280 Speaker 4: In the US, both as consumers of capital and as 568 00:32:01,360 --> 00:32:05,960 Speaker 4: investors in capital, And so that's really the driving thing 569 00:32:06,040 --> 00:32:09,320 Speaker 4: that we're thinking of. How can we make our capital 570 00:32:09,360 --> 00:32:12,640 Speaker 4: markets more robust, How can we make sure that they're 571 00:32:12,840 --> 00:32:16,040 Speaker 4: more attractive for people, And that means getting the balance 572 00:32:16,120 --> 00:32:21,120 Speaker 4: right of having regulations that give people the confidence to 573 00:32:21,240 --> 00:32:23,880 Speaker 4: enter into those markets, knowing that they're going to get 574 00:32:23,880 --> 00:32:26,880 Speaker 4: the disclosure that they that they need to understand what 575 00:32:26,920 --> 00:32:30,160 Speaker 4: they're investing in, but also knowing that there'll be the 576 00:32:30,200 --> 00:32:34,640 Speaker 4: freedom that they have to invest and that the barriers 577 00:32:34,640 --> 00:32:36,720 Speaker 4: to entry aren't so high that we're stuck with the 578 00:32:36,760 --> 00:32:39,560 Speaker 4: same incumbents fifty years from now that we have today. 579 00:32:40,000 --> 00:32:44,240 Speaker 4: So making sure that there's a vibrancy and dynamic entry 580 00:32:44,640 --> 00:32:49,080 Speaker 4: and exit from the markets. So that's something that we're 581 00:32:49,120 --> 00:32:52,400 Speaker 4: thinking about all the time. And I think if the 582 00:32:52,440 --> 00:32:58,080 Speaker 4: SEC doesn't have that at the forefront of our minds, preserving, protecting, 583 00:32:58,840 --> 00:33:02,800 Speaker 4: and fostering the capital markets, then we're not doing our job. 584 00:33:03,040 --> 00:33:05,840 Speaker 4: And so I expect we'll just double down on that 585 00:33:06,840 --> 00:33:10,560 Speaker 4: in coming years. Part of that means that we can't 586 00:33:10,680 --> 00:33:14,440 Speaker 4: do what we did in recent years, which is just 587 00:33:14,560 --> 00:33:19,719 Speaker 4: throw bunches of rules out there and sort of suggests 588 00:33:19,760 --> 00:33:22,560 Speaker 4: that there are going to be massive changes across the board. 589 00:33:22,640 --> 00:33:25,560 Speaker 4: We have to do things without adequate notice and comment. 590 00:33:25,600 --> 00:33:28,160 Speaker 4: We have to do things in a way that's deliberate 591 00:33:28,240 --> 00:33:32,400 Speaker 4: and careful and invites participation. We have to think about 592 00:33:32,480 --> 00:33:37,120 Speaker 4: some fundamental rules that maybe haven't been modernized and need 593 00:33:37,160 --> 00:33:43,600 Speaker 4: to be so it'll be a difficult job, but again 594 00:33:43,720 --> 00:33:47,320 Speaker 4: worth very worthwhile to protect these capital markets, which I 595 00:33:47,320 --> 00:33:48,920 Speaker 4: really do think are the end view of the world. 596 00:33:49,080 --> 00:33:52,320 Speaker 1: What's an example of something that needs to be modernized. 597 00:33:53,000 --> 00:33:56,760 Speaker 4: Well, I mean I think about rules like transfer agent rules. 598 00:33:57,800 --> 00:34:01,160 Speaker 4: I think those could be modernized. And I think we 599 00:34:01,240 --> 00:34:06,360 Speaker 4: should be continuously looking at rules around paper delivery versus 600 00:34:06,440 --> 00:34:10,520 Speaker 4: electronic delivery. And that may seem trivial, but I think 601 00:34:11,120 --> 00:34:15,840 Speaker 4: we need to be on top of how investors want 602 00:34:15,880 --> 00:34:18,680 Speaker 4: communications to come to them, and it's not a matter 603 00:34:18,719 --> 00:34:21,560 Speaker 4: of just getting an email versus getting something in the mail. 604 00:34:23,120 --> 00:34:26,640 Speaker 4: They should be getting information in an interactive format so 605 00:34:26,680 --> 00:34:29,480 Speaker 4: that if they want to dive deeper, it's easy for 606 00:34:29,520 --> 00:34:31,080 Speaker 4: them to do that. And I think a lot of 607 00:34:31,120 --> 00:34:34,520 Speaker 4: financial firms are thinking about disclosure that way. But because 608 00:34:34,960 --> 00:34:38,960 Speaker 4: our rules are sort of centered around everything being in paper, 609 00:34:39,960 --> 00:34:43,640 Speaker 4: it hasn't allowed for that dynamic innovation in the way 610 00:34:43,960 --> 00:34:49,320 Speaker 4: investors receive and process information. So that's talk about boring. 611 00:34:49,360 --> 00:34:51,160 Speaker 4: That may sound a little bit boring, but I think 612 00:34:51,200 --> 00:34:54,600 Speaker 4: that's a really exciting avenue for potential positive change. 613 00:34:54,880 --> 00:34:56,839 Speaker 1: You're about a month away from the end of your term. 614 00:34:57,040 --> 00:34:59,120 Speaker 1: What do you want your legacy at the SEC to be? 615 00:35:01,040 --> 00:35:03,839 Speaker 4: Well, you know, this is an agency that I think 616 00:35:04,120 --> 00:35:06,640 Speaker 4: is a wonderful agency. And the thing that makes it 617 00:35:06,680 --> 00:35:10,200 Speaker 4: wonderful is it's not about one person. It's about an 618 00:35:10,239 --> 00:35:15,799 Speaker 4: amazing set of employees who are very dedicated to fostering 619 00:35:16,160 --> 00:35:22,960 Speaker 4: capital markets, protecting investors, facilitating capital formation. And so I 620 00:35:23,000 --> 00:35:27,040 Speaker 4: hope that the legacy of me as a commissioner is 621 00:35:27,120 --> 00:35:30,000 Speaker 4: just that I've helped to shepherd that agency and that 622 00:35:30,440 --> 00:35:34,080 Speaker 4: it's not you know, people are able to look at 623 00:35:34,080 --> 00:35:37,719 Speaker 4: the SEC and see it as a regulator that does 624 00:35:37,800 --> 00:35:40,080 Speaker 4: get that balance right that we were just talking about. 625 00:35:40,640 --> 00:35:44,440 Speaker 1: Can I ask you've seen so many tickers? Yeah, and 626 00:35:44,480 --> 00:35:46,320 Speaker 1: this is a question we often ask if like people 627 00:35:46,320 --> 00:35:48,600 Speaker 1: have a favorite ticker. I'm assuming that you're not going 628 00:35:48,640 --> 00:35:51,319 Speaker 1: to be able to answer any answer that, So can 629 00:35:51,360 --> 00:35:53,759 Speaker 1: I ask, do you ever has there ever been a 630 00:35:53,840 --> 00:35:56,240 Speaker 1: ticker ETF ticker that made you chuckle. 631 00:35:57,400 --> 00:35:59,960 Speaker 4: Yes, but I cannot answer which one is my favorite. 632 00:36:00,719 --> 00:36:01,879 Speaker 2: Actually, let me ask you this. 633 00:36:02,400 --> 00:36:04,879 Speaker 3: Tickers aren't you don't control those? 634 00:36:04,920 --> 00:36:05,320 Speaker 2: Correct? 635 00:36:05,320 --> 00:36:09,239 Speaker 3: Like tickers are basically you follow with the exchange. But 636 00:36:09,320 --> 00:36:12,040 Speaker 3: that's like you just deal the fund. 637 00:36:12,400 --> 00:36:14,600 Speaker 4: If we controlled the tickers, they would all be like 638 00:36:15,120 --> 00:36:17,440 Speaker 4: fund four seven five three. 639 00:36:17,280 --> 00:36:20,440 Speaker 2: Like in China, just numbers. Yeah, yeah, so no, we. 640 00:36:20,400 --> 00:36:22,719 Speaker 4: Do not control the tickers. 641 00:36:23,040 --> 00:36:25,080 Speaker 1: All right, Commissioner, thank you so much for your time. 642 00:36:25,160 --> 00:36:26,400 Speaker 4: It's been fun to be with you all. 643 00:36:26,520 --> 00:36:33,720 Speaker 1: Thank you, thank you. Thanks for listening to Trillions. Until 644 00:36:33,760 --> 00:36:35,560 Speaker 1: next time. You can find us on the Bloomberg terminal, 645 00:36:35,640 --> 00:36:40,080 Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, or wherever else you'd 646 00:36:40,080 --> 00:36:41,920 Speaker 1: like to listen. We'd love to hear from you. Hit 647 00:36:42,000 --> 00:36:44,640 Speaker 1: us up on social I'm at Joel Webber Show, He's 648 00:36:44,680 --> 00:36:48,920 Speaker 1: at Eric Paulchina's Trillions is produced by Magnus Hendrickson Special 649 00:36:48,960 --> 00:36:52,120 Speaker 1: thanks to Rachel Lewis Christy for protection help on this episode. 650 00:36:52,280 --> 00:36:55,640 Speaker 1: Brendan Newman is our executive producer. Sage Bowman is the 651 00:36:55,680 --> 00:36:56,800 Speaker 1: head of Bloomberg Podcasts.