WEBVTT - An Inside Look at the Trump SEC With Commissioner Hester Peirce 0:00:05.800 --> 0:00:06.520 Welcome at Trillions. 0:00:06.519 --> 0:00:08.440 I'm Joel Webber and I'm Eric Belchernas. 0:00:11.480 --> 0:00:15.880 Eric. Today we are at the SEC interviewing a commissioner 0:00:15.960 --> 0:00:19.320 who's been on the podcast before, Commissioner Hester Purse. I'm 0:00:19.320 --> 0:00:21.840 really excited to talk to her because she's been a 0:00:21.880 --> 0:00:25.840 fabulous interview twice already, and now we have a new 0:00:25.920 --> 0:00:28.280 administration and she's got a role on it. But she's 0:00:28.280 --> 0:00:29.680 not going to be here for that much longer. So 0:00:29.720 --> 0:00:31.479 what are you most interested in talking to her about. 0:00:31.720 --> 0:00:34.760 Yeah, well, for the past several years, she's been the 0:00:34.800 --> 0:00:38.000 dissenting opinion. Well, now she's kind of in the she's 0:00:38.000 --> 0:00:40.919 in the majority of the power position, and so I 0:00:40.920 --> 0:00:42.920 bet she's excited and she's going to be able to 0:00:42.960 --> 0:00:45.159 have a lot of influence. I think now, especially with 0:00:45.240 --> 0:00:47.760 the new chairman coming in, it's probably way more aligned. 0:00:47.400 --> 0:00:49.600 With her views. So it's Paul. It's interesting. 0:00:49.760 --> 0:00:52.519 Just a lot of patients and now I think a 0:00:52.520 --> 0:00:56.200 lot of their framework will be influenced by some of 0:00:56.240 --> 0:00:58.440 the way she saw things that was in the minority 0:00:58.880 --> 0:01:01.880 for several years. Obviously, crypto is a big one. Private assets, 0:01:02.440 --> 0:01:04.720 the ETF share class. There's just so much. 0:01:04.520 --> 0:01:05.399 Going on right now. 0:01:05.520 --> 0:01:06.840 Regulation in general. 0:01:06.720 --> 0:01:10.399 Just regulation in general. So yeah, it's it's really cool. 0:01:10.440 --> 0:01:11.640 And by the way, you forget to mention, we're on 0:01:11.680 --> 0:01:12.240 the tenth floor. 0:01:12.319 --> 0:01:13.280 Tenth floor. We did it. 0:01:15.080 --> 0:01:16.920 The commissioner, So. 0:01:17.560 --> 0:01:20.720 If it's famous for people industry, you go, it's a 0:01:20.760 --> 0:01:23.839 tenth tenth floor decision. So we're on the tenth floor 0:01:23.840 --> 0:01:24.640 and it's pretty cool. 0:01:24.800 --> 0:01:27.640 Joining us also Stacey Marie Ishmael, who's the head of 0:01:27.959 --> 0:01:34.640 cross Assets and Crypto at Bloomberg News, this time on trillions. 0:01:35.840 --> 0:01:41.720 SEC Commissioner Hester Perce Commissioner, Welcome back to Trillians. 0:01:41.800 --> 0:01:42.839 It's great to be here. 0:01:43.280 --> 0:01:46.560 Thanks for hosting us at the SEC, which is a 0:01:46.600 --> 0:01:49.880 real privilege and treat. So we've had the privilege of 0:01:49.920 --> 0:01:52.640 having you on Trillions. This is the third time, and 0:01:52.680 --> 0:01:53.960 the first one was in the early days of the 0:01:54.000 --> 0:01:56.320 pandemic and it has stuck with me that you were 0:01:56.320 --> 0:01:58.440 baking banana bread with chocolate chip cookies at the time. 0:01:58.840 --> 0:02:00.840 And then the next time we had on the podcast, 0:02:01.720 --> 0:02:03.600 I asked a similar question. You said you were doing 0:02:03.600 --> 0:02:07.400 ginger snaps, which also may have had like an internal 0:02:07.440 --> 0:02:09.840 currency at the SEC, and I'm curious, what are you 0:02:09.840 --> 0:02:10.880 baking now? 0:02:12.040 --> 0:02:14.960 I'm just baking boring bread because we need to get 0:02:14.960 --> 0:02:15.920 back to the basics. 0:02:16.120 --> 0:02:18.480 Okay, how are the bread skills going? 0:02:19.680 --> 0:02:22.720 I mean my bread skills. It's bread I like to eat. 0:02:22.919 --> 0:02:25.720 Nobody else necessarily likes to eat it, except for my dad. 0:02:26.040 --> 0:02:30.200 Okay, serve yourself first. Okay, real question on a scale 0:02:30.240 --> 0:02:33.400 of one to ten, ten being high. How libertarian is 0:02:33.440 --> 0:02:34.359 the SEC? Right now? 0:02:35.560 --> 0:02:38.639 Well, I mean the SEC is a regulatory agency, so 0:02:38.800 --> 0:02:41.799 I think we're governed by our statute as opposed to 0:02:41.840 --> 0:02:48.520 by a philosophy like libertarian thinking. So I mean I 0:02:48.560 --> 0:02:50.680 think I can't put it on a scale. 0:02:51.440 --> 0:02:53.560 Is it a how big of a shift do you 0:02:53.560 --> 0:02:54.240 feel it is? 0:02:54.280 --> 0:02:56.359 Well, I mean to get to your question, So first 0:02:56.400 --> 0:02:58.280 of all, let me give you my disclaimer, because I 0:02:58.280 --> 0:03:00.040 think it is important here. My views are my my 0:03:00.080 --> 0:03:02.320 own views as a commissioner, not necessarily those of the 0:03:02.400 --> 0:03:05.280 SEC or my fellow commissioners. And I mean I think 0:03:06.400 --> 0:03:11.400 when I approach things, I'm thinking, how can we maximize 0:03:11.400 --> 0:03:14.040 people's ability to engage in transactions that they want to 0:03:14.080 --> 0:03:16.680 engage in in a way that's consistent with our statute, 0:03:17.000 --> 0:03:19.720 which requires us to think about things like investor protection 0:03:20.919 --> 0:03:23.960 and capital formation and the integrity of the marketplace, right. So, 0:03:25.160 --> 0:03:28.160 I think we have changed in the sense, you know, 0:03:28.200 --> 0:03:31.240 in the last one hundred or so days, in the 0:03:31.320 --> 0:03:35.040 sense that now we're looking at things in terms of 0:03:35.360 --> 0:03:38.800 not looking for ways in the statute or outside of 0:03:38.800 --> 0:03:41.240 the statute to block people from doing what they want 0:03:41.280 --> 0:03:45.520 to do, but we're looking for ways to facilitate people's 0:03:45.520 --> 0:03:47.960 ability to do things that they want to do again 0:03:48.120 --> 0:03:50.240 in a way that's consistent with our objectives. So I 0:03:50.240 --> 0:03:54.240 do think there's been a pretty dramatic shift in approach. 0:03:54.800 --> 0:03:59.400 And to that point, one of the big big areas, 0:03:59.600 --> 0:04:02.400 or at least one of the big industries as it were, 0:04:02.480 --> 0:04:05.640 that's been vocal with how pleased they are about that 0:04:05.680 --> 0:04:10.120 particular shift. Are folks at the intersection of cryptodigital assets, payments, 0:04:10.120 --> 0:04:13.320 and fintech to an extent, and what we're increasingly hearing 0:04:13.320 --> 0:04:17.600 from them is not just we're so glad that there 0:04:17.640 --> 0:04:22.640 are these pauses in some of the cases or withdrawals 0:04:22.640 --> 0:04:25.560 and others, but that they're looking forward to kind of 0:04:25.640 --> 0:04:29.080 proactive rulemaking, you know, to really get to that you know, 0:04:29.640 --> 0:04:34.120 much vaunted phrase of regulatory clarity. What in the environment 0:04:34.160 --> 0:04:36.120 that you're describing, where as you say you want to 0:04:36.240 --> 0:04:40.360 enable and facilitate. Does a proactive rule making process look 0:04:40.480 --> 0:04:43.400 like as opposed to, you know, regulation by enforcement. 0:04:44.320 --> 0:04:46.479 Well, I think that what we're trying to do is 0:04:46.480 --> 0:04:49.640 we're trying to use our regulatory divisions for their intended purpose, 0:04:49.720 --> 0:04:54.440 which is to help people think through how a pretty 0:04:54.480 --> 0:04:59.960 complex set of regulations applies in their particular facts and circumstances. 0:05:00.600 --> 0:05:03.320 And so some of that can be done on a 0:05:03.360 --> 0:05:08.919 guidance basis, so providing maybe generalized guidance that applies to 0:05:08.960 --> 0:05:13.640 more than just one person or entity. Some of it 0:05:13.680 --> 0:05:18.440 is simply saying these activities or things are not within 0:05:18.520 --> 0:05:23.159 our purview as a securities regulator, and some of it 0:05:22.880 --> 0:05:28.960 is thinking about very individualized no action letters. And some 0:05:29.000 --> 0:05:33.440 of it is then thinking longer term about rulemaking. How 0:05:33.480 --> 0:05:37.520 can we go out for notice and comment rule making, 0:05:37.560 --> 0:05:41.159 get the public's input, and then how can we develop 0:05:41.279 --> 0:05:44.880 longer term, more durable rules. And then part of it 0:05:44.920 --> 0:05:47.400 is working with other regulators and with Congress to think 0:05:47.440 --> 0:05:55.400 about the technical aspects of the legislative framework. So it's 0:05:55.400 --> 0:05:58.039 a mix of things, but that's kind of how we're 0:05:58.080 --> 0:05:58.720 looking at it. 0:05:59.120 --> 0:06:01.440 We want to be basically divide this into a couple 0:06:01.520 --> 0:06:05.760 categories privates, crypto, and then we're going to look at 0:06:05.760 --> 0:06:07.440 some ETF share class questions. 0:06:07.520 --> 0:06:10.280 But first privates, so private assets. 0:06:10.480 --> 0:06:13.760 You had said on a podcast recently that you were 0:06:13.760 --> 0:06:16.560 looking on how to allow access to private markets. You 0:06:16.600 --> 0:06:19.160 didn't love that you had to be a credited investor. 0:06:19.600 --> 0:06:22.560 How do you do that? The ETF industry is obviously 0:06:22.800 --> 0:06:26.839 famous at pushing the envelope. State Street found a way 0:06:26.920 --> 0:06:30.279 to break that fifteen percent illiquidity barrier by using Apollo 0:06:30.760 --> 0:06:33.440 to provide a liquidity backstop, and it seemed to me 0:06:33.520 --> 0:06:36.920 that was a groundbreaking filing in that it does show 0:06:36.960 --> 0:06:40.080 how you can go beyond fifteen percent iliquid holdings. 0:06:40.680 --> 0:06:42.760 And where do we go from here? 0:06:42.920 --> 0:06:48.160 Is r ETF's the right way to get retail investors 0:06:48.200 --> 0:06:54.400 private investments. What's your take on making this issue you know, 0:06:54.480 --> 0:06:56.880 something that people can look forward to and what should 0:06:56.880 --> 0:06:57.360 they expect. 0:06:58.120 --> 0:07:01.800 Well, I think there's an openness to using the ETF 0:07:03.960 --> 0:07:07.960 well and using the exemptive process really to allow people 0:07:08.000 --> 0:07:10.440 to try new things that might be in an ETF 0:07:10.480 --> 0:07:15.000 we're in some other kind of fund, but that's kind 0:07:15.000 --> 0:07:17.880 of what we've done historically, is people could come in 0:07:17.920 --> 0:07:20.560 for exemptive relief and then you've built on that. It's 0:07:20.600 --> 0:07:25.960 an iterative process. Someone might see what another issuer has 0:07:26.040 --> 0:07:29.920 done and might iterate on that slightly, and then you know, 0:07:29.960 --> 0:07:32.160 that's how we got ETFs right. We did a lot 0:07:32.200 --> 0:07:35.000 of these exemptive applications and then finally we decided to 0:07:35.000 --> 0:07:38.280 do a rule. We did a rule too long, but still, 0:07:38.440 --> 0:07:41.720 you know, through that period of years we were able 0:07:41.720 --> 0:07:44.800 to figure out what kind of conditions were important. And 0:07:44.880 --> 0:07:47.880 so I expect that process to continue, and I expect 0:07:48.680 --> 0:07:52.040 and hope that we will be willing to engage very 0:07:52.200 --> 0:07:57.360 you know, answering questions, hearing from from people what kind 0:07:57.400 --> 0:08:00.320 of products they'd like to develop, and helping them think 0:08:00.360 --> 0:08:05.440 through what that looks like. That's a normal function that 0:08:05.480 --> 0:08:09.520 I think we'll be carrying out. We sometimes impose, or 0:08:09.560 --> 0:08:12.280 the staff as sometimes I think at the behest of 0:08:12.320 --> 0:08:16.320 the Commission imposed restrictions that really don't have a statutory basis. 0:08:17.200 --> 0:08:19.080 If that's happened in the past, I think we should 0:08:19.120 --> 0:08:24.320 revisit those decisions. And so there's definitely, in my view, 0:08:24.320 --> 0:08:27.080 there should be an openness. That's just how the statute 0:08:27.120 --> 0:08:29.760 is meant to work. I don't think that's the only 0:08:29.840 --> 0:08:32.800 way that retail investors should be able to get access 0:08:33.120 --> 0:08:35.840 to private investments. I do think that's a way that 0:08:35.960 --> 0:08:40.000 many of them may want to because it's diversified access, 0:08:41.200 --> 0:08:44.600 it's access with professional management through vehicles they're comfortable with 0:08:44.679 --> 0:08:48.720 and used to. But again, as I said before, that 0:08:48.760 --> 0:08:55.800 accredited investor standard as a barrier is pretty counter to 0:08:55.880 --> 0:08:59.160 what we as Americans generally believe, which is that if 0:08:59.160 --> 0:09:00.960 people want to put the hard work in to do 0:09:01.000 --> 0:09:03.960 their investment research and they want to invest, they shouldn't 0:09:03.960 --> 0:09:05.920 have to come to the Commission and say, oh, and 0:09:05.960 --> 0:09:10.480 by the way, I'm wealthy too. That's really not very American. 0:09:11.080 --> 0:09:14.120 So on this issue of private assets, the State Street 0:09:14.120 --> 0:09:17.520 of Polo ETF, which is a ticker, prev it got 0:09:17.520 --> 0:09:20.839 approved or it may have just released, there was this 0:09:21.240 --> 0:09:23.199 a little bit of back and forth with the SEC 0:09:23.280 --> 0:09:24.040 and State Street. 0:09:25.040 --> 0:09:26.640 I've been doing this for twenty years. I had never 0:09:26.640 --> 0:09:27.640 seen anything quite like it. 0:09:27.679 --> 0:09:32.120 Where it was listed, and the day before it listed, 0:09:32.160 --> 0:09:35.440 there was a letter from the State SEC saying there's 0:09:35.480 --> 0:09:38.320 like five things they weren't really comfortable with, and it 0:09:38.400 --> 0:09:42.599 talked about without resolution of staff comments, and that was 0:09:42.640 --> 0:09:44.000 a I just wanted to ask about that. 0:09:44.000 --> 0:09:46.599 Do you have any more information on that or what 0:09:47.440 --> 0:09:48.120 went down there. 0:09:48.520 --> 0:09:51.760 Well, I don't want to speak about a particular issuers 0:09:51.840 --> 0:09:55.000 engagement with the SEC, but I think just generally, the 0:09:55.120 --> 0:09:59.400 comment process is a very healthy process where you get 0:09:59.440 --> 0:10:02.120 lots and back, lots of back and forth between staff 0:10:02.679 --> 0:10:07.160 and someone who's trying to get a product filing through, 0:10:07.960 --> 0:10:10.880 and those conversations are very important. The idea is to 0:10:10.960 --> 0:10:13.600 get to a place where the disclosures are clear and 0:10:13.640 --> 0:10:17.560 they clearly portray for for people who will be buying 0:10:17.559 --> 0:10:21.720 those products what it is they're getting. And so that's 0:10:21.720 --> 0:10:25.560 an important process and and you know it needs to 0:10:25.600 --> 0:10:29.480 be fully carried out before products are are out there. 0:10:29.840 --> 0:10:32.319 So I think that's just in general. You know, as 0:10:32.360 --> 0:10:37.640 you mentioned at the outset, this particular product was something 0:10:37.679 --> 0:10:40.840 new and so you know, it's not surprising that there 0:10:41.120 --> 0:10:44.360 are a lot of questions. But again, that iterative process 0:10:44.480 --> 0:10:45.720 is really important. 0:10:52.440 --> 0:10:53.880 Okay, let's talk crypto. 0:10:54.679 --> 0:10:56.480 We had to do that first because we thought we 0:10:56.480 --> 0:10:58.360 would get way down in crypto for a long time, 0:10:58.400 --> 0:11:02.319 so I can't imagine that we had Okay, so I'm 0:11:02.360 --> 0:11:05.600 pretty obsessed to I've really it's been a very exciting 0:11:05.800 --> 0:11:06.360 two years. 0:11:07.160 --> 0:11:09.440 Okay, Bitcoin ETF huge race. 0:11:11.000 --> 0:11:13.959 That's over though, and boy were they a huge hit. 0:11:14.080 --> 0:11:17.320 I mean, biggest launch ever, very exciting. Now we've got 0:11:17.360 --> 0:11:20.199 the spaghetti cannon, which is what Ben Jonson Morning Star 0:11:20.280 --> 0:11:24.600 calls it, where there's now over eighty filings sitting on 0:11:25.000 --> 0:11:28.120 maybe not your desk, but somebody's desk, and they include 0:11:28.160 --> 0:11:31.559 everything from XRP Solana, which we call me legit all coins. 0:11:32.120 --> 0:11:34.960 Then it goes right down to you know, things like bonk. 0:11:35.280 --> 0:11:37.120 Half the stuff I have to google when I see 0:11:37.120 --> 0:11:40.720 the filing, I don't totally know. And then you've got 0:11:40.800 --> 0:11:43.800 a trump coin ETF, a Milania ETF, and then a 0:11:43.880 --> 0:11:46.920 two X Malania ETF. I mean, they're already going so 0:11:47.000 --> 0:11:49.920 far out there, and this is an interesting question for me. 0:11:50.360 --> 0:11:53.360 How do you look at approving all those and if 0:11:53.400 --> 0:11:55.560 you go to maybe what you'd think is the most 0:11:56.040 --> 0:11:58.959 maybe volatile one, which would be like a mean Coin ETF, 0:11:59.040 --> 0:12:03.800 like a Trumper Milana ETF. Given that's the president, how 0:12:03.800 --> 0:12:07.360 does the SEC deal with evaluating like the investment merits 0:12:07.920 --> 0:12:10.800 and if that one would be okay, with the rest 0:12:10.880 --> 0:12:14.000 ipso facto be okay. Like you see, I'm trying to 0:12:14.040 --> 0:12:16.720 I'm trying to develop a logic on how like to handicap, 0:12:16.800 --> 0:12:20.000 how much and how soon these will be approved. 0:12:20.400 --> 0:12:23.040 Well, I think first step in your logic should be 0:12:23.120 --> 0:12:25.640 to remember that the SEC is not a merit regulator, 0:12:25.679 --> 0:12:29.600 and so when something goes effective, when when something is 0:12:29.640 --> 0:12:31.920 green lit at the SEC, it does not mean that 0:12:31.920 --> 0:12:35.080 we're telling people this is a good investment for anyone 0:12:35.200 --> 0:12:37.440 or for you in particular. People have to make that 0:12:37.480 --> 0:12:40.640 decision for themselves. I mean that really does go back 0:12:40.720 --> 0:12:44.840 to I think the first question about how the SEC 0:12:45.280 --> 0:12:49.000 thinks philosophically, Well, we think philosophically the way Congress told 0:12:49.040 --> 0:12:51.239 us too, which is not to be a merit regulator. 0:12:51.320 --> 0:12:54.000 So take that out of the out of the equation. 0:12:55.880 --> 0:12:58.160 The second thing I'd say is we have gotten lots 0:12:58.200 --> 0:13:02.120 of filings, and I'm glad you're compiling the list. That's helpful. 0:13:03.200 --> 0:13:08.000 So all of those filings have to go through folks 0:13:08.120 --> 0:13:11.280 in our division of Trading and Markets. Most of these 0:13:11.320 --> 0:13:14.760 are ETPs, I think, not ETFs, some maybe ETFs. Those 0:13:14.760 --> 0:13:19.559 go through investment management. But we have a limited number 0:13:19.559 --> 0:13:21.800 of people working on these, and there's just a lot 0:13:21.840 --> 0:13:24.760 of incoming now. And so this is something that I said, 0:13:24.800 --> 0:13:27.520 when you know early on in this journey, as I've 0:13:27.559 --> 0:13:32.480 been calling it, toward more cryptoclarity. People have to be patient. 0:13:32.559 --> 0:13:34.839 There's just there's a lot going on. There are a 0:13:34.880 --> 0:13:38.240 lot of people who want things done. There there's a 0:13:38.320 --> 0:13:41.559 real need for patients because any filing that comes in, 0:13:41.679 --> 0:13:43.839 our staff has to check to see whether it meets 0:13:43.880 --> 0:13:48.880 the technical requirements, and so that's part of what's going on. 0:13:50.080 --> 0:13:52.160 And then you know, there are a lot of other 0:13:52.240 --> 0:13:56.079 things that I have said could also complicate things. We 0:13:56.160 --> 0:13:59.280 have some ongoing litigation we have that we're trying to 0:13:59.400 --> 0:14:04.240 work through. We have lots of other considerations that we're 0:14:04.280 --> 0:14:10.040 thinking about, and so you know, just be patient. Then 0:14:10.160 --> 0:14:14.240 on some of these filings, I would say, we got 0:14:14.280 --> 0:14:17.200 in a comment letter. We're also taking lots of comments 0:14:17.200 --> 0:14:20.280 in our written input from the Crypto Task Force, and 0:14:20.560 --> 0:14:22.680 one comment came in from an exchange saying, hey, you 0:14:22.680 --> 0:14:26.920 should really think about generic listing standards on the ETP side. 0:14:26.960 --> 0:14:30.400 And you know, that is a request that really resonates 0:14:30.400 --> 0:14:33.400 with me too. So I think there there's a lot 0:14:33.400 --> 0:14:34.920 of work to do and we have to think about 0:14:34.920 --> 0:14:36.160 how to do it most efficiently. 0:14:36.760 --> 0:14:38.960 And just one quick follow up on that, remember in 0:14:39.040 --> 0:14:42.520 the Bitcoin ETF extravaganza. 0:14:42.560 --> 0:14:43.480 For lack of a better word. 0:14:43.920 --> 0:14:46.000 You they all launched in the same day. You know, we 0:14:46.040 --> 0:14:49.320 call it the Kentucky Derby because they normally you file and. 0:14:49.240 --> 0:14:50.640 You you're out the day. 0:14:51.120 --> 0:14:53.960 It's staggered depending on when you filed. Are you going 0:14:54.040 --> 0:14:56.240 to group them together, group them together again, or was 0:14:56.280 --> 0:14:57.960 that sort of a one off that we probably won't 0:14:58.000 --> 0:14:58.480 see again. 0:14:59.200 --> 0:15:01.760 You know, I don't know how these filings will be done. 0:15:01.800 --> 0:15:03.920 As you said, they're not all the same, right, But 0:15:04.000 --> 0:15:07.760 I think one thing to remember that whole process was 0:15:07.880 --> 0:15:14.080 terribly mismanaged, and so we had been going for ten years, 0:15:14.080 --> 0:15:17.840 We had been getting filings and so thinking about how 0:15:17.840 --> 0:15:19.440 to do it, and then there was so much build 0:15:19.520 --> 0:15:21.520 up and then the court case. You know, there was 0:15:21.560 --> 0:15:24.040 just a lot going on there. So that was a 0:15:24.160 --> 0:15:27.840 unique set of circumstances. The second thing I'd say is 0:15:27.880 --> 0:15:31.080 if we just said well, it's first in, first out, 0:15:31.960 --> 0:15:34.800 then we would encourage people to put in really terrible 0:15:34.840 --> 0:15:38.120 filings just to get first in the door. And I 0:15:38.200 --> 0:15:41.400 really want people to know that the better the work 0:15:41.400 --> 0:15:44.440 that you do and the lead up, the easier it 0:15:44.520 --> 0:15:47.760 is for us to process these things. Because our staff 0:15:47.800 --> 0:15:50.720 has to look at everything, and again, if they're technical deficiencies, 0:15:50.800 --> 0:15:53.120 they have to tell you that. And so it really 0:15:53.280 --> 0:15:55.400 what we really want to do is encourage people to 0:15:55.440 --> 0:15:58.440 come in with good filings, to have good conversations with us, 0:15:58.840 --> 0:16:02.840 and help us think through through how we can prioritize 0:16:03.560 --> 0:16:05.560 getting through the work that we have. 0:16:06.560 --> 0:16:10.480 I'm interested in your comment about, you know, embracing the 0:16:10.520 --> 0:16:15.360 idea of not being a merit based regulator and from everything. 0:16:15.720 --> 0:16:17.160 One of the things we've been hearing a lot from 0:16:17.160 --> 0:16:20.120 the administration is, you know, this emphasis on kind of 0:16:20.160 --> 0:16:24.120 individual research, that people can make informed decisions based on 0:16:25.120 --> 0:16:28.680 the processes and systems and information that's available to them. 0:16:29.360 --> 0:16:32.360 How are you thinking about that in the context where 0:16:32.920 --> 0:16:35.920 there is at the same time, kind of a deprioritization 0:16:36.000 --> 0:16:40.320 in some agencies of explicit investor protection in the sense 0:16:40.400 --> 0:16:43.160 of some agencies that were more dedicated to saying, Okay, 0:16:43.600 --> 0:16:45.680 if a bad thing did happen and you were not 0:16:45.760 --> 0:16:49.040 at fault, there was fraud, there was something you didn't 0:16:49.040 --> 0:16:51.760 have control over here with the systems that were able 0:16:51.800 --> 0:16:55.320 to protect you, or here were mechanisms for whistleblowers. Do 0:16:55.360 --> 0:16:58.480 you see any tension between these sort of forces that 0:16:58.520 --> 0:17:00.000 we're seeing at the same time. 0:17:00.000 --> 0:17:01.880 Well, at the start, I said, I can't speak for 0:17:01.920 --> 0:17:04.240 the SEC. I only speak for myself, and I certainly 0:17:04.240 --> 0:17:06.119 don't want to speak for other agencies. But what I 0:17:06.119 --> 0:17:08.720 will say about the SEC is investor protection is one 0:17:08.720 --> 0:17:12.639 of our core mandates and so that's something that we 0:17:12.680 --> 0:17:16.360 will continue to emphasize here. And part of investor protection 0:17:16.600 --> 0:17:20.200 is ensuring that people have the ability to make investment 0:17:20.240 --> 0:17:23.119 decisions that they want to make and to make those 0:17:23.800 --> 0:17:26.439 without having the government say no, we think that you 0:17:27.400 --> 0:17:30.120 can't invest in this thing or you know, so it's 0:17:30.240 --> 0:17:34.120 investment opportunity is part of investor protection. Part of investor 0:17:34.160 --> 0:17:41.440 protection is ensuring that where there is fraud, we are 0:17:41.440 --> 0:17:44.040 there with enforcement if you know. Of course, our role 0:17:44.160 --> 0:17:48.679 is limited to the statutory constraints that we have and 0:17:48.720 --> 0:17:51.960 that's where securities regulator. But if there's securities fraud, we're 0:17:52.560 --> 0:17:57.159 definitely interested in bringing those cases. And we have a 0:17:57.320 --> 0:18:01.440 very active whistleblower program. You can go on our website 0:18:01.480 --> 0:18:05.679 and file what's called a TCR and you can select 0:18:05.960 --> 0:18:08.560 to be elect to be a whistleblower, and that's very 0:18:08.600 --> 0:18:11.560 important and will continue to be a Third piece of 0:18:11.600 --> 0:18:15.199 investor protection is disclosure and so a lot of the 0:18:15.240 --> 0:18:18.560 back and forth that you see with these filings in 0:18:18.640 --> 0:18:21.840 the investment management area, for example, is ensuring that there's 0:18:21.880 --> 0:18:25.360 adequate disclosure so that people are aware of the risks, 0:18:25.480 --> 0:18:27.760 and that will continue to be an important part of 0:18:27.760 --> 0:18:31.440 what we do. It's you know, it's a big chunk 0:18:31.480 --> 0:18:34.720 of our staff works on these issues, whether it's with 0:18:35.080 --> 0:18:40.159 investment companies or whether it's with public companies, and that 0:18:40.320 --> 0:18:42.760 is going to continue to be an important role that 0:18:43.320 --> 0:18:47.360 we play. So I would urge you not to look 0:18:47.400 --> 0:18:51.439 at this from the perspective of at least you know, 0:18:51.480 --> 0:18:56.080 as we're looking at it, it's investor protection is very central, 0:18:56.920 --> 0:19:00.160 and I would urge you not to assume that we're 0:19:00.160 --> 0:19:03.760 just saying no more enforcement. That is absolutely not true, 0:19:03.960 --> 0:19:08.760 and I think people should be careful to know that 0:19:09.280 --> 0:19:12.399 it's not anything goes, you know, we want to build 0:19:12.960 --> 0:19:16.199 a framework that encourages an industry that is healthy and 0:19:16.280 --> 0:19:21.359 dynamic and competitive and where people can be confident in 0:19:21.400 --> 0:19:22.679 the disclosures they're getting. 0:19:23.840 --> 0:19:27.960 I'm curious about the relationship between the SEC and CFTC 0:19:28.280 --> 0:19:31.520 regarding crypto, because you've got an investor protection there. It's 0:19:31.560 --> 0:19:34.159 not something that's the same thing between the CFTC and 0:19:34.200 --> 0:19:37.280 the SECA so, and you have been a go between 0:19:37.280 --> 0:19:40.080 between the two agencies. So I'm curious, like who takes 0:19:40.119 --> 0:19:44.080 the lead in crypto and this new administration. 0:19:45.800 --> 0:19:48.359 Well, I think what we're trying to do with the 0:19:48.400 --> 0:19:54.159 SEC is identify where our jurisdiction begins. And so that 0:19:54.280 --> 0:19:58.320 means that some of crypto is not in our jurisdiction, 0:19:59.720 --> 0:20:03.359 I mean, and what means Congress has laid out a 0:20:03.359 --> 0:20:07.600 framework and said, here's your jurisdiction, and so some of 0:20:07.640 --> 0:20:10.000 that stuff is outside. It may be at the CFTC, 0:20:10.080 --> 0:20:13.440 it may be at another regulator, and that's the way 0:20:13.480 --> 0:20:16.320 it is now. But of course Congress is working on 0:20:16.560 --> 0:20:21.679 legislation on market structure, and that would perhaps create some 0:20:21.760 --> 0:20:26.399 new regulatory authority, maybe for the CFTC at least as 0:20:27.320 --> 0:20:31.399 they have designed the statute, there'd be a lot of 0:20:31.480 --> 0:20:35.680 new authority for the CFTC. And so we will be 0:20:36.520 --> 0:20:39.360 good partners with them and try to work with them. 0:20:39.400 --> 0:20:41.600 There may be some areas where Congress wants us to 0:20:41.600 --> 0:20:46.640 work jointly with the CFTC explicitly, but more generally. Our 0:20:46.720 --> 0:20:50.040 jurisdictions bump up against each other all the time, and 0:20:50.080 --> 0:20:54.480 so we will have lots of constant contact and communication. 0:20:55.280 --> 0:20:58.879 The new chairman coming in, Chairman quintends it's someone that 0:20:58.920 --> 0:21:02.720 I've worked with before, someone Paul knows, Chairman Atkins know 0:21:02.760 --> 0:21:05.080 as well, and so I think there's going to be 0:21:05.119 --> 0:21:09.080 continued good work across agency lines. 0:21:10.960 --> 0:21:12.360 Let's talk about tokenization. 0:21:12.560 --> 0:21:16.600 So the more you kind of dive into crypto, one 0:21:16.640 --> 0:21:19.360 of the areas beyond the tokens is the blockchain, right, 0:21:19.840 --> 0:21:24.159 major technology. It's possible, so much just moves on the blockchain. Right. 0:21:24.200 --> 0:21:28.200 They're trying to use the blockchain for the back office 0:21:28.560 --> 0:21:32.400 of a lot of the ETF industry. And then Larry 0:21:32.440 --> 0:21:34.199 Fink comes out and says, I want the SEC to 0:21:34.359 --> 0:21:38.639 rapidly approve the tokenization of bonds and stocks, and so 0:21:38.680 --> 0:21:42.320 I go to these tokenization crypto events and they all 0:21:42.359 --> 0:21:44.400 think everything's going to be a token someday and that's 0:21:44.440 --> 0:21:47.680 the quote endgame, and you know it. 0:21:47.680 --> 0:21:48.240 Is a vision. 0:21:48.680 --> 0:21:52.119 They're very excited, but they got to have the SEC 0:21:52.920 --> 0:21:54.320 on board to pull this off. 0:21:54.359 --> 0:21:55.399 So where do you stand on that. 0:21:56.240 --> 0:21:58.840 We're having a roundtable next week on the topic of 0:21:58.880 --> 0:22:01.520 tokenization and we'll see what people have to say there. 0:22:01.560 --> 0:22:04.600 It's one of the topics that we've gotten a lot 0:22:04.640 --> 0:22:09.000 of interest in sort of after this, you know, announcement 0:22:09.040 --> 0:22:13.040 that we're open to thinking about things in new ways. 0:22:13.480 --> 0:22:16.240 So we'll see what comes out of that roundtable and 0:22:16.280 --> 0:22:18.159 what comes out of the We've been getting again a 0:22:18.160 --> 0:22:22.639 lot of written input, and I'm open to trying to 0:22:22.680 --> 0:22:26.760 facilitate people trying this technology to see where it will fit. 0:22:27.320 --> 0:22:29.480 I suspect what will happen is that there'll be some 0:22:29.600 --> 0:22:32.520