1 00:00:00,000 --> 00:00:02,120 Speaker 1: And share Gainstler, thank you very much for joining me 2 00:00:02,160 --> 00:00:04,480 Speaker 1: in a very happy birthday to you, of course, thank 3 00:00:04,519 --> 00:00:07,840 Speaker 1: you so right working on this birthday. The rule proposed 4 00:00:07,880 --> 00:00:11,920 Speaker 1: today deals with volume based discounts that exchange is offered 5 00:00:11,920 --> 00:00:14,600 Speaker 1: a broker dealers. You say this rule would help enable 6 00:00:14,640 --> 00:00:17,800 Speaker 1: more competition in this market. But something that was raised 7 00:00:17,800 --> 00:00:20,240 Speaker 1: at this open meeting was the idea of the timeline 8 00:00:20,280 --> 00:00:23,520 Speaker 1: and sequencing with the other equity market structure proposals that 9 00:00:23,600 --> 00:00:27,200 Speaker 1: the SEC has already made. How do you see the 10 00:00:27,200 --> 00:00:29,440 Speaker 1: timing working out with all these different rules here. 11 00:00:29,720 --> 00:00:32,519 Speaker 2: Well, first, thank you for the birthday wishes, and I 12 00:00:32,560 --> 00:00:35,040 Speaker 2: am working because I love the job. My identical twin 13 00:00:35,159 --> 00:00:38,560 Speaker 2: brother he's at the beach. But in terms of these 14 00:00:40,080 --> 00:00:44,400 Speaker 2: this proposal today, this is trying to level some of 15 00:00:44,440 --> 00:00:48,760 Speaker 2: the playing field between and amongst brokers because stock exchanges 16 00:00:48,880 --> 00:00:54,959 Speaker 2: today are offering different fee packages through these rebates, so 17 00:00:55,000 --> 00:00:58,080 Speaker 2: that the mid size brokers and the smaller brokers in 18 00:00:58,200 --> 00:01:01,840 Speaker 2: essence pay higher net fees. So that's what this proposal is. 19 00:01:02,160 --> 00:01:06,640 Speaker 2: You're right, we made some proposals last December addressing four 20 00:01:06,720 --> 00:01:11,920 Speaker 2: specific areas and we've gotten good public feedback on that, 21 00:01:12,200 --> 00:01:15,399 Speaker 2: and the staff is working on possible recommendations for the 22 00:01:15,400 --> 00:01:20,280 Speaker 2: Commission to consider on each of those prior proposals. 23 00:01:20,720 --> 00:01:23,120 Speaker 1: On the pace of that work, though, again coming to 24 00:01:23,160 --> 00:01:25,600 Speaker 1: the timeline and sequencing question, can you give us an 25 00:01:25,600 --> 00:01:27,720 Speaker 1: idea of how close that work is to being done? 26 00:01:29,080 --> 00:01:32,479 Speaker 2: Two things. One is we don't do things against a clock. 27 00:01:32,680 --> 00:01:35,959 Speaker 2: It's really about the staff work and feeding things up 28 00:01:36,000 --> 00:01:40,080 Speaker 2: to our five member commission. Then we sometimes have discussions 29 00:01:40,120 --> 00:01:44,200 Speaker 2: and negotiations even and compromises amongst the five of us. 30 00:01:45,800 --> 00:01:48,600 Speaker 2: But when you look at what we've been doing over 31 00:01:48,640 --> 00:01:53,120 Speaker 2: the last few years, it generally is somewhere between twelve 32 00:01:53,200 --> 00:01:59,960 Speaker 2: and twenty four months between a proposal an adoption, generally 33 00:02:00,120 --> 00:02:02,880 Speaker 2: somewhere in the middle of that. I can't think of 34 00:02:02,920 --> 00:02:05,200 Speaker 2: the last ones we've done ear sort of fifteen to 35 00:02:05,280 --> 00:02:09,519 Speaker 2: nineteen months. But again, it's not against a clock. It's 36 00:02:09,560 --> 00:02:14,239 Speaker 2: really getting all the feedback, thinking through the economics, thinking 37 00:02:14,280 --> 00:02:18,560 Speaker 2: through the legal authorities, and most importantly what goal are 38 00:02:18,560 --> 00:02:21,040 Speaker 2: we seeking. So in the equity markets, we were seeking 39 00:02:21,080 --> 00:02:26,080 Speaker 2: trying to help promote competition and efficiency basically for those 40 00:02:26,240 --> 00:02:34,000 Speaker 2: individual investors in the market, getting better pricing in the market, 41 00:02:34,400 --> 00:02:38,799 Speaker 2: and of course helping issuers that are issuing the public companies. 42 00:02:39,120 --> 00:02:42,240 Speaker 1: Another rule that's been proposed relates to climate disclosures and 43 00:02:42,360 --> 00:02:46,320 Speaker 1: potentially Scope one, two and three emissions. You received a 44 00:02:46,400 --> 00:02:49,960 Speaker 1: letter from a number of California Members of Congress Democrats 45 00:02:50,040 --> 00:02:53,760 Speaker 1: last week who suggested you should be following California's footsteps. They, 46 00:02:53,800 --> 00:02:56,160 Speaker 1: of course just passed legislation at a company with more 47 00:02:56,160 --> 00:02:58,760 Speaker 1: than billion dollars in revenue has to disclose Scope one, 48 00:02:58,840 --> 00:03:02,280 Speaker 1: two and three emissions. Do they have a point? Is 49 00:03:02,320 --> 00:03:04,640 Speaker 1: what California is doing going to set a precedent for 50 00:03:04,680 --> 00:03:07,000 Speaker 1: the SEC or potentially make it more complicated from a 51 00:03:07,000 --> 00:03:09,960 Speaker 1: compliance standpoint if the SEC doesn't pursue Scope three as well. 52 00:03:10,520 --> 00:03:14,000 Speaker 2: I appreciate the letter. It's part of our robust comment file. 53 00:03:15,600 --> 00:03:20,160 Speaker 2: Members of Congress and the public have commented. We have 54 00:03:20,200 --> 00:03:24,520 Speaker 2: a different role than the legislators in California. Our role 55 00:03:24,880 --> 00:03:28,240 Speaker 2: we're not a climate regulator, We're not a climate agency. 56 00:03:30,680 --> 00:03:36,200 Speaker 2: In essence, we're an agency that's climate risk neutral. It's 57 00:03:36,280 --> 00:03:41,200 Speaker 2: about disclosure to the public investors. So you're an investor 58 00:03:42,120 --> 00:03:46,800 Speaker 2: and do you find this climate risk information relevant to 59 00:03:47,640 --> 00:03:51,600 Speaker 2: your investment decisions? And what we know is just looking 60 00:03:51,640 --> 00:03:54,720 Speaker 2: back to twenty twenty one two years ago, over half 61 00:03:54,800 --> 00:03:58,240 Speaker 2: of the largest companies, over half of the Russell one thousand, 62 00:03:58,560 --> 00:04:05,160 Speaker 2: are already making disclosures around their greenhouse gas emissions. To 63 00:04:05,320 --> 00:04:09,600 Speaker 2: use the terms you use, Scope one and Scope two. Fewer, 64 00:04:10,360 --> 00:04:14,840 Speaker 2: far fewer making disclosures around so called scope three. If 65 00:04:14,880 --> 00:04:19,920 Speaker 2: the California law what's now been signed, so that changes 66 00:04:20,200 --> 00:04:23,839 Speaker 2: some of the economics. It means more companies will be 67 00:04:23,960 --> 00:04:27,840 Speaker 2: making these disclosures in a few years, and so that 68 00:04:27,920 --> 00:04:30,800 Speaker 2: does affect when we think through the economics of anything 69 00:04:30,800 --> 00:04:31,320 Speaker 2: we're doing. 70 00:04:31,600 --> 00:04:35,039 Speaker 1: In addition to receiving that letter last week, something else 71 00:04:35,080 --> 00:04:37,280 Speaker 1: that happened last week, or rather didn't happen, was the 72 00:04:37,320 --> 00:04:40,880 Speaker 1: SEC acting to appeal a court ruling from August in 73 00:04:40,960 --> 00:04:43,320 Speaker 1: the Gray Scale case Greyscale, of course, trying to convert 74 00:04:43,360 --> 00:04:47,320 Speaker 1: GBTC into a spot ETF. I know you can't comment 75 00:04:47,400 --> 00:04:50,080 Speaker 1: on ongoing litigation, but should we still be considering that 76 00:04:50,160 --> 00:04:53,719 Speaker 1: ongoing litigation given that lack of appeal at this point? 77 00:04:53,760 --> 00:04:55,159 Speaker 1: And if not, what happens next? 78 00:04:55,240 --> 00:04:57,360 Speaker 2: Wait? Didn't you just say that you knew I wasn't 79 00:04:57,360 --> 00:04:59,720 Speaker 2: going to comment on the litigation, But let me just say, what. 80 00:04:59,760 --> 00:05:00,880 Speaker 1: Is it still ongoing? 81 00:05:00,960 --> 00:05:04,039 Speaker 2: Since you didn't appeal we didn't appeal last Friday. I 82 00:05:04,040 --> 00:05:07,640 Speaker 2: think that's accurate, so you could still in culture and form. 83 00:05:07,720 --> 00:05:10,160 Speaker 2: But what we have in front of us, just so 84 00:05:10,240 --> 00:05:14,599 Speaker 2: that the viewing public understands, we have not one, but multiple. 85 00:05:14,640 --> 00:05:18,360 Speaker 2: I think it's eight or ten filings that the staff 86 00:05:18,440 --> 00:05:23,159 Speaker 2: and ultimately the Commission is considering for what's called exchange 87 00:05:23,200 --> 00:05:29,360 Speaker 2: traded products for bitcoin to be in a security, so 88 00:05:29,400 --> 00:05:32,200 Speaker 2: the bitcoin would be held and then there'd be something 89 00:05:32,240 --> 00:05:36,120 Speaker 2: called an exchange product and that would trade on various 90 00:05:36,279 --> 00:05:39,680 Speaker 2: stock exchanges. And those filings are in front of us. 91 00:05:40,120 --> 00:05:42,240 Speaker 2: I can't prejudge any one of them, but there's eight 92 00:05:42,320 --> 00:05:43,680 Speaker 2: or ten that we're looking at. 93 00:05:44,040 --> 00:05:45,960 Speaker 1: Well, there is a large number, and there is kind 94 00:05:46,000 --> 00:05:48,000 Speaker 1: of a narrative in this market, and I wonder if 95 00:05:48,000 --> 00:05:49,760 Speaker 1: you could put it to rest that someone's going to 96 00:05:49,839 --> 00:05:52,039 Speaker 1: get to go first. Is that likely to happen or 97 00:05:52,080 --> 00:05:54,520 Speaker 1: is it likely to be a group approval. If you're 98 00:05:54,560 --> 00:05:56,880 Speaker 1: going to have one, a bunch of products could be 99 00:05:56,880 --> 00:05:58,440 Speaker 1: approved at the same time. 100 00:05:58,880 --> 00:06:03,560 Speaker 2: Again, I'm not going to prejudge the staff's doing work 101 00:06:03,600 --> 00:06:07,760 Speaker 2: on those multiple filings, but it's also about those companies. 102 00:06:08,960 --> 00:06:13,160 Speaker 2: Are issuers see when a company is actually or an 103 00:06:13,200 --> 00:06:17,760 Speaker 2: asset manager is seeking to take something public. These exchange 104 00:06:17,800 --> 00:06:22,360 Speaker 2: traded products need to register with the SECA and they 105 00:06:22,360 --> 00:06:26,279 Speaker 2: go through a filing somewhat similar to going public like 106 00:06:26,360 --> 00:06:30,600 Speaker 2: an IPO. And so it's really the work of our 107 00:06:30,640 --> 00:06:34,279 Speaker 2: Division of Corporation Finance that gives feedback. Our Division of 108 00:06:34,320 --> 00:06:36,840 Speaker 2: Trading and Markets of course looks at the filings of 109 00:06:36,880 --> 00:06:38,320 Speaker 2: the exchanges well. 110 00:06:38,200 --> 00:06:40,919 Speaker 1: And we know that issuers have had interaction with the staff. 111 00:06:41,040 --> 00:06:44,320 Speaker 1: Questions the staff has asked that issuers have tried to address. 112 00:06:44,480 --> 00:06:46,040 Speaker 1: Do you have a sense at all of whether or 113 00:06:46,080 --> 00:06:49,320 Speaker 1: not the attempts to address those questions and issues have 114 00:06:49,440 --> 00:06:51,440 Speaker 1: been productive, fruitful, changed anything. 115 00:06:52,200 --> 00:06:56,080 Speaker 2: Again, this is a time tested process that goes back decades. 116 00:06:56,160 --> 00:07:00,919 Speaker 2: It's like the staff of the SECA. It's called the 117 00:07:00,960 --> 00:07:07,800 Speaker 2: Disclosure Review Team. But in that group they respond and 118 00:07:07,800 --> 00:07:12,240 Speaker 2: give feedback to potential issuers. But I don't have any 119 00:07:12,280 --> 00:07:14,480 Speaker 2: details on those individual conversations. 120 00:07:14,680 --> 00:07:16,800 Speaker 1: All right, Chair Gensler, thank you very much for joining 121 00:07:16,880 --> 00:07:19,280 Speaker 1: us on Bloomberg Television. We appreciate your time, and again, 122 00:07:19,560 --> 00:07:20,280 Speaker 1: happy birthday.