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Speaker 1: The SEC chair, Gary Gensler, says a government shutdown will

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Speaker 1: lead to limited markets oversight by the SEC. He spoke

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Speaker 1: with Bloomberg's Kyle Lines in an exclusive interview after the

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Speaker 1: SEC voted in favor of new rules to clamp down

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Speaker 1: on investment fund names. It says can be misleading to.

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Speaker 2: Pick up on crypto knowing that you cannot comment on

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Speaker 2: any specific litigation, that you were just one member of

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Speaker 2: a five member commission. When you take collectively recent court

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Speaker 2: decisions we have seen, how have they made you? Gary

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Speaker 2: Gensler think differently about regulating this space.

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Speaker 3: I'll tell you I think the same thing. It's about

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Speaker 3: ensuring for compliance and protecting the investing public. And this

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Speaker 3: is a field. It kind of reminds me a bit

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Speaker 3: of the nineteen twenties securities markets one hundred years ago,

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Speaker 3: where a lot of people were getting hurt and Congress

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Speaker 3: came along and said, we've got to clean that up.

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Speaker 3: And of course we had the Great Depression. And the

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Speaker 3: securities laws apply to crypto's security tokens, and there's nothing

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Speaker 3: incompatible with those tokens. With the securities laws, investors still

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Speaker 3: benefit from disclosure, and investors get to choose based on

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Speaker 3: the disclosure. Investors benefit from laws against fraud and manipulation

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Speaker 3: and other conflicts in the markets. And we've just seen

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Speaker 3: so many people hurt and lost their money hoping for

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Speaker 3: a better future, and there's so many hucksters and fraudsters

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Speaker 3: in this field, and.

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Speaker 2: So nothing any court would say would change your mind

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Speaker 2: on that.

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Speaker 3: I wish something a court could say which would actually

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Speaker 3: bring the compliance sooner. But this was a field that

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Speaker 3: was built as a global field, so a lot of

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Speaker 3: it's outside of the US, and we have very robust

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Speaker 3: securities laws in this country. Having said that, there are

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Speaker 3: a lot of folks in this field that are trying

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Speaker 3: to say, well, those don't apply to us. When you

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Speaker 3: can go to a website and you can see who

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Speaker 3: stands behind that token, and they're marketing ideas and they're

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Speaker 3: going to conferences, and I suspect you've interviewed one or

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Speaker 3: two of them too, you'd be right about that.

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Speaker 2: I'm not going to ask you to comment specifically on

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Speaker 2: what's next in the Gray Scale case, but and part

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Speaker 2: of that ruling is about the distinction between futures and

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Speaker 2: spot and not being clear that really fundamental they were

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Speaker 2: differently in terms of the fraudam manipulation you often talk about.

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Speaker 2: My question to you is is there a world, given

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Speaker 2: those concerns you have about fraudam manipulation, that the SEC

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Speaker 2: could actually revoke approval of a bitcoin futures.

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Speaker 3: Etf Again, as I said earlier, I'm not going to

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Speaker 3: get ahead of the staff work. We take into consideration

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Speaker 3: anytime a court rules, and we consider it and think

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Speaker 3: it through and deal with filings that are in front

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Speaker 3: of us. And we have a number of open filings

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Speaker 3: in the bitcoin exchange traded product space for spot product.

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Speaker 2: Sure, but could you rule out revoking the futures product.

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Speaker 3: Again, I'm just not going to speak to the filings,

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Speaker 3: and you were absolutely right. There are a number of

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Speaker 3: bitcoin futures exchange traded funds and they've been live since

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Speaker 3: about two years.

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Speaker 2: I'd like to shift gears to the question of Scope three,

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Speaker 2: knowing that you've gotten a lot of pushback on either

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Speaker 2: direction about its inclusion. I just wonder if it is

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Speaker 2: as binary, is Scope three is in the climate disclosure

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Speaker 2: rules or it's not. Is there a room for nuance

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Speaker 2: here that it could be applied in certain cases to

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Speaker 2: certain companies but not others.

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Speaker 3: Again, I don't want to get ahead of a staff.

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Speaker 3: We're talking about climate risk disclosure. Companies are making climate

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Speaker 3: risk disclosure now, and this all comes back to a

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Speaker 3: basic idea investors get to decide what investments they make,

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Speaker 3: and investors representing tens of trillions of dollars of assets

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Speaker 3: under management literally or making investment choices today based upon

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Speaker 3: climate risk disclosures by public companies. Over eighty percent of

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Speaker 3: the top thousand companies are currently as of twenty twenty one,

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Speaker 3: making climate risk disclosures. So our role is to try

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Speaker 3: to bring some comparability, some efficiency to those already set disclosures.

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Speaker 3: You asked about something very particular about greenhouse gas emissions,

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Speaker 3: so called Scope three emissions, and we've heard a lot

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Speaker 3: from the public, we've heard from members of Congress comment

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Speaker 3: and so we're taking those into consideration and thinking through

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Speaker 3: how to address those comments about the economics about the

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Speaker 3: evolution of this. But I don't want to prejudge where

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Speaker 3: this might come out.

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Speaker 2: You just mentioned efficiency, and I'm not sure how much

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Speaker 2: the word efficiency can apply to what we're seeing on

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Speaker 2: Capitol Hill these days in terms of trying to continue

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Speaker 2: to get the government funded. You've spoken a bit about

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Speaker 2: the impacts that would have on the SEC from an

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Speaker 2: operations standpoint, if people are furloughed, limit the ability of

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Speaker 2: the agency to do its work. But knowing that during

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Speaker 2: the debt ceiling fight you talked a lot about the

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Speaker 2: potential significant financial market ramifications of a default, is there

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Speaker 2: anything significant about a government shutdown that financial markets should

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Speaker 2: be worried about.

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Speaker 3: I would say for the market regulators Securities and Exchange Commission.

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Speaker 3: I'll leave Chair Benham to speak about the other great

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Speaker 3: market regulator, the CFGC. But we're appropriated agencies, and so

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Speaker 3: the public should understand we will largely be a skeletal

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Speaker 3: staff under the laws, and so the normal oversight we

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Speaker 3: have in markets will not be possible, just simply not

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Speaker 3: for how many days that happens. Companies that want to

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Speaker 3: go public may not find that their filings could even

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Speaker 3: be reviewed by the SEC and the like during tendency

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Speaker 3: of a shutdown. Those are the most immediate functions. But

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Speaker 3: also we won't be able to oversee the markets if

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Speaker 3: there's significant events or in the like.

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Speaker 2: But you don't anticipate significant events could emanate from the

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Speaker 2: government shutting down, potentially for a prolonged period. Of time

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Speaker 2: that would be disruptive to napsual activity.

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Speaker 3: We have the deepest, most liquid capital markets, but the base,

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Speaker 3: the absolute base of that capital markets is our US

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Speaker 3: treasury market. It's about a quarter of the market, it's

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Speaker 3: twenty five trillion dollars, but it's the base, and the

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Speaker 3: trust in that market is in poort. Just that we

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Speaker 3: function well, that we were able to resolve our differences

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Speaker 3: in our democratic ways. But importantly, the treasury markets will

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Speaker 3: still function. They'll be trading in the stock markets. You

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Speaker 3: just won't have the oversight of the market regulators.

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Speaker 1: Sec Shair Gary Gensler, speaking with Bloomberg's Kayley lines