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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Thank you SEC Chair

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Speaker 1: Gary Gensler for to be with you. Er, We're so

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Speaker 1: excited to have you. I want to start with the

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Speaker 1: uphill battle.

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Speaker 2: Some would say you faced at the helm of the

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Speaker 2: SEC in terms of you have this very ambitious agenda,

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Speaker 2: one of the most ambitious we've seen at the SEC

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Speaker 2: in years, but it's faced a lot of legal troubles,

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Speaker 2: pushback from Wall Street Corporate America.

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Speaker 1: A stat here as I have is your rules.

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Speaker 2: Are facing a record number of court challenges. So given

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Speaker 2: that backdrop and the legal hurdles you faced, how would

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Speaker 2: you grade this SEC? Is it an a foreffort or

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Speaker 2: would you say it's a bit more?

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Speaker 3: Look, Anne Marie, I'm proud to be in this road.

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Speaker 3: It's a privilege every day to fight on behalf Americans,

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Speaker 3: investors and issuers, and it's really that. It's like William Douglass,

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Speaker 3: our third chair and went on to be on the

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Speaker 3: Supreme Court, said, we're the investor's advocate, but we also

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Speaker 3: look out for people raising money, the issuers, the folks

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Speaker 3: in the middle, some of whom are in this room,

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Speaker 3: the broker dealers, the stock exchange is the investment advisors

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Speaker 3: and so forth. Ultimately, the investors and issuers are their customers,

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Speaker 3: and we are trying to update the rules for the

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Speaker 3: twenty twenties. Now we put out an agenda of about

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Speaker 3: fifty to fifty five items to do. By the way,

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Speaker 3: my predecessor Jay Clayton did sixty four, but we have

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Speaker 3: already finalized and implemented really consequential rules, like in the

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Speaker 3: last couple of weeks implemented shortening the settlement cycle in

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Speaker 3: half to one day from two days. That means if

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Speaker 3: an investor sells their stock on a Monday, they get

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Speaker 3: their cash Tuesday. They don't have to wait till Wednesday.

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Speaker 3: But we also did a lot around corporate governance, how

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Speaker 3: insiders sell their stock in the market, and some important

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Speaker 3: rules there to restrict the use of non public information

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Speaker 3: or even sing down some challenges that we had with

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Speaker 3: China and China being in our markets and in the

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Speaker 3: cyber world that public companies have to report material cyber events.

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Speaker 3: But also we just finalized a rule that all of

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Speaker 3: us in this room, if our information at a broker dealer,

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Speaker 3: investment advisor gets hacked, they have to give us a

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Speaker 3: notice on that. I mean these are things that are

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Speaker 3: consequential that we've been able to be successful. So I

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Speaker 3: think it's a great agency and we continue basically fighting

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Speaker 3: on behalf of the American investor and American issue.

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Speaker 2: So the most recent reboot, though, came from the Fifth Court,

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Speaker 2: which I think you know about, of course, your attempt

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Speaker 2: to regulate private equity funds and also protect private investors

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Speaker 2: like pension funds.

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Speaker 1: This is what the panel had to say.

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Speaker 2: From the court quote, it exceeded the statutory authority by

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Speaker 2: adopting the rule.

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Speaker 1: So now what's your next move? What's your spons today?

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Speaker 3: Well, one is we do everything within the law and

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Speaker 3: how courts interpret the law. We're still assessing and looking

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Speaker 3: at that ruling out of the Fifth Circuit down in

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Speaker 3: Texas and Louisiana, Mississippi, and so we're still assessing that

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Speaker 3: as a commission. But at its core, what we were

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Speaker 3: really saying there was investors in private funds, which has

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Speaker 3: grown to thirty trillion dollars in assets under management. Investors

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Speaker 3: in those funds, the limited partners would get quarterly disclosures

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Speaker 3: about their fees, performance and arrangements with others, so called

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Speaker 3: side letters, and it was under authority that was put

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Speaker 3: into law under DoD Frank. The court had a different

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Speaker 3: view of that new authority. But we're still assessing what

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Speaker 3: to do. But we do everything again a marie within

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Speaker 3: the with the law is and how courts interpret it,

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Speaker 3: and if need be, we pivot.

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Speaker 2: What are the risks to the financial system, say that

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Speaker 2: this doesn't happen and blocked are good.

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Speaker 3: At the core, what we were seeking to achieve as

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Speaker 3: a commission was greater transparency to investors, not to the public,

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Speaker 3: but to the investors in these funds, and who's behind

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Speaker 3: those investors, those endowment funds, those pension funds. They're the teachers,

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Speaker 3: they're the firefighters in every single state in the US,

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Speaker 3: They're the university's endowments that are investing in these finds.

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Speaker 3: And so it was really about greater transparency, instilling greater

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Speaker 3: competition and an important part of the capital markets.

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Speaker 1: This came from the fifth circuit. You mentioned Texas.

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Speaker 2: A lot of these rebooks that are coming to the SEC,

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Speaker 2: are going through and to.

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Speaker 3: Other agencies right across the administrative state. You're seeing more

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Speaker 3: filings and in a couple of maybe leading in certain circuits.

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Speaker 2: So what's your response to that that a lot of

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Speaker 2: this is happening through Texas, Louisiana.

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Speaker 1: Does it feel political.

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Speaker 3: To you, Well, we respond in whatever court we're in,

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Speaker 3: and I deeply believe in our democracy, parties have a

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Speaker 3: right to go into court. We're a law enforcement agency.

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Speaker 3: We bring seven or eight hundred law enforcement actions a year,

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Speaker 3: many of them settled with some of them that go

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Speaker 3: into court, and we really respect the courts and follow

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Speaker 3: what they say.

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Speaker 2: We also have frozen right now the emissions disclosures because

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Speaker 2: that's also facing a ton of lawsuits. So SEC decided

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Speaker 2: to freeze them. What happens if they become unfrozen? How

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Speaker 2: quickly do companies need to disclose these kind Just.

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Speaker 3: A little background. We're a disclosure agency. We're a securities agency.

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Speaker 3: And what President Roosevelt pulled together with Congress ninety years ago.

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Speaker 4: We just had our ninetieth birthday. It was kind of cool.

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Speaker 3: And what they pulled together is that investors get to

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Speaker 3: decide on what investments they want, and that we the

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Speaker 3: SEC are merit neutral. Further, we are not a climate regulator.

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Speaker 3: We are not an environmental regulator. We're not an ESG regulator.

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Speaker 3: We're securities regulator. But what we found when I came

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Speaker 3: into office, many investors are investing in companies based on

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Speaker 3: their climate risk disclosures. And of the top thousand market

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Speaker 3: cap companies so called Russell one thousand, ninety percent already

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Speaker 3: are making disclosures around climate risk, and nearly sixty percent

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Speaker 3: are already making some disclosures around greenhouse gas emissions.

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Speaker 4: That would you.

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Speaker 3: Asked therein I think we had a role and what

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Speaker 3: we finalized a rule to say if material It's only

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Speaker 3: if material, investors would need to make those disclosures to

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Speaker 3: their investors, because the investors are already making decisions.

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Speaker 4: But you're right, it's front of a court.

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Speaker 3: I'm not going to get ahead of our really terrific

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Speaker 3: lawyers who will have a chance to lay out that

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Speaker 3: in front of a course.

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Speaker 2: I guess the question I have is will there be

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Speaker 2: a timeline that companies will know that they need.

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Speaker 1: To start disclosing this.

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Speaker 2: How quickly can you move with the rules once it's

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Speaker 2: out of the court.

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Speaker 3: Yeah, Marie, it's a good question, of course. It relates

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Speaker 3: to what a court tells us. We laid out a

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Speaker 3: set of implement it's called implementation timeline over a course

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Speaker 3: of several years, depending upon what the court says. We

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Speaker 3: did stay the rule, so that means it's stayed. But

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Speaker 3: once we hear from the courts, Well, I think you've

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Speaker 3: got a good question.

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Speaker 1: So another place that you've been trying to tighten the rule.

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Speaker 4: Sorry if we didn't make news there.

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Speaker 2: Yeah, so it's okay, maybe here we can.

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Speaker 1: And a lot of people are interested in this.

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Speaker 2: There's a lot of messages when you tweeted that you

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Speaker 2: were going to be doing this conference, a lot of

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Speaker 2: messages from the crypto community.

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Speaker 1: This is a place that you've tried to also tighten

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Speaker 1: the rule.

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Speaker 3: One hundred and twenty trillion dollar capital markets and lo

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Speaker 3: and behold, I made it six minutes and fifteen seconds.

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Speaker 4: And now you bring up.

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Speaker 1: Crypto, Well there's some other you know, other leg to

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Speaker 1: get used.

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Speaker 3: It gets clicks for Bloomberg.

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Speaker 1: Well, people are, people are.

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Speaker 2: Interested in this, and actually it's becoming a political issue.

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Speaker 2: So but I first want to talk about how do

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Speaker 2: you reconcile broadly going after some of the issues in

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Speaker 2: the industry at the same time as approving things like

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Speaker 2: the bitcoin ETF and potentially the theory of ETF.

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Speaker 3: So in terms of these exchange traded products, any investor

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Speaker 3: can express themselves and purchase bitcoin, for instance. And when

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Speaker 3: I came to the agency in twenty one, actually there

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Speaker 3: were some filings around mutual funds and they ultimately led

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Speaker 3: to bitcoin futures exchange traded funds. Those have been around

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Speaker 3: for three years. The courts ruled around something called spot

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Speaker 3: exchange traded products. I know it's kind of technical, but

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Speaker 3: ruled that we should be consistent. We pivoted, we approve

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Speaker 3: those in January. I would say this, what the investing

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Speaker 3: public has now is an exchange traded product on regulated

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Speaker 3: stock exchanges. Now, let me compare that to how people

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Speaker 3: generally buy crypto. They're buying it or selling it often

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Speaker 3: on non compliant platforms. Why do I say non compliant?

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Speaker 3: These platforms also include significant number of tokens, and without

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Speaker 3: pre judging any one of them, many of them are securities.

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Speaker 4: Because it's the law of the land.

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Speaker 3: We follow the Supreme Court's law the land regarding this.

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Speaker 3: There's fifteen twenty thousand various tokens and they're offered investment

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Speaker 3: contracts schemes that are investment contracts. And you look at it,

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Speaker 3: the American public is not getting the proper disclosure that

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Speaker 3: they are required to get by law, but they need

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Speaker 3: we're merit neutral. But you all, if you're investing, if

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Speaker 3: you're listening to the public, you're not getting the.

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Speaker 4: Disclosure that you're supposed to get.

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Speaker 3: And the intermediaries in the middle of the market, those

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Speaker 3: so called exchanges are broker dealers and so forth. If

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Speaker 3: they've got hundreds of offerings on that platform, think about it,

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Speaker 3: how many of those offerings don't have some group of

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Speaker 3: entrepreneurs in the middle. It's a sort of blize logic.

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Speaker 3: The result this is a field that the leading lights

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Speaker 3: from a couple of years ago are either in jail,

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Speaker 3: about to go to jail, or waiting extra day.

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Speaker 4: Think about it. This is that field.

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Speaker 3: That's the field right now where the public has really

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Speaker 3: been harmed and there's significant non compliance in the field.

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Speaker 3: And so yes, we're bringing that in front of courts

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Speaker 3: and those will play out because folks that are not

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Speaker 3: complying with the law hurt the American public.

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Speaker 1: But still you're approving ETFs.

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Speaker 2: And the one I think there's a lot of excitement

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Speaker 2: around is this ethereum ETF because we could potentially see

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Speaker 2: it very soon.

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Speaker 3: Will they are actually just so I can help you

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Speaker 3: out there. As of last year, was already an ethereum

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Speaker 3: exchange traded fund based on ethereum futures. Ethereum futures have

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Speaker 3: been trading on the Chicago Amercantile Exchange.

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Speaker 4: For three or four years.

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Speaker 3: We actually UH went live last year and Ethereum futures ETF.

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Speaker 3: But yes, we had five filings around cash ethereum exchange

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Speaker 3: traded products. Again, I apologize to be that technical, but

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Speaker 3: these already exist in some form. But we approve those filings.

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Speaker 3: What is in front of us, and it's done at

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Speaker 3: a staff level, is what's called the registration statements, the

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Speaker 3: disclosure statements. And again these disclosures are really important. They're

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Speaker 3: important to investors making investment decisions.

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Speaker 1: Will we see that in the next few weeks.

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Speaker 3: I don't know the timing, but it's going smoothly. You

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Speaker 3: can almost follow it publicly. You see these filings, Bloomberg

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Speaker 3: then report so on them, you get more clicks.

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Speaker 1: Do you think we'll see it before the election.

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Speaker 3: Again, I'm not trying to determine what the staff is doing,

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Speaker 3: but it's going smoothly, and I just envision it at

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Speaker 3: a staff level and smoothly play out and it's really

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Speaker 3: about not the asset managers making the full disclosure so

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Speaker 3: that those registration statements can go effective.

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Speaker 4: And those lawyers know what that is.

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Speaker 3: It's something our Division of Corporation Finance handles hundreds or

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Speaker 3: if not thousands of times over anybody's career.

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Speaker 4: It's smoothly functioning.

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Speaker 3: It's really up to the asset managers to make the

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Speaker 3: proper disclosures.

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Speaker 2: Back to some of the crypto companies, though a lot

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Speaker 2: of them have moved abroad to places like London and Singapore.

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Speaker 1: So in that sense, do you think.

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Speaker 2: That investors are actually safe because they're still innovating and

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Speaker 2: they're still out there in the marketplace, which is not

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Speaker 2: in the United States.

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Speaker 3: So the extent that they're operating within the basic protections

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Speaker 3: of providing the full disclosure what Roosevelt called complete disclosure,

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Speaker 3: he called the Securities First Securities Act, the Truth and

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Speaker 3: Securities Act. If they're really telling the truth about it,

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Speaker 3: and they're making the disclosures and properly registered, and then

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Speaker 3: if the intermediaries are operating within the law without the

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Speaker 3: conflicts and looks. So much of this field is highly centralized.

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Speaker 3: It's not decentralized. That's not what's happening here. It's highly

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Speaker 3: centralized around a few platforms that are also centralizing and

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Speaker 3: commingling things that we would never allow anywhere else, and

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Speaker 3: we don't. The law doesn't allow you to be trading

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Speaker 3: against your customers and operating a so called exchange and

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Speaker 3: trading in front and possibly also taking investments in a

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Speaker 3: investment contract or security and then listing and getting the

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Speaker 3: listing pop. I mean, these are all happening potentially at

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Speaker 3: these and again we see some of the leading you know,

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Speaker 3: two years ago that would have filled a room much

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Speaker 3: bigger than this if they were sitting on the stage

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Speaker 3: or now sitting in jail or waiting jail.

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Speaker 1: Part of the reason why oh I say.

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Speaker 3: This and you but this is a serious thing. These

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Speaker 3: are a lot of folks that are not living within.

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Speaker 4: Our securities laws.

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Speaker 3: But they're not necessarily living within our Bank Secrecy Act

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Speaker 3: around any money laundering, and they're not necessarily living within

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Speaker 3: the Commodity Exchange Act. Like this is a field that's

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Speaker 3: sort of built up on a business model that it's

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Speaker 3: a non compliant model, and it's not tiki tacky. It's

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Speaker 3: about real protections for investors and for other people that

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Speaker 3: want to access the capital markets. It's about trust in

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Speaker 3: those capital markets.

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Speaker 1: As you know.

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Speaker 4: Have I been clear?

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Speaker 1: Yeah, you're being very clear. As you know.

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Speaker 2: Crypto, though, is becoming almost an election issue. There's reports

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Speaker 2: that foreign President Trump is going to speak at this

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Speaker 2: big bitcoin conference. He said that he will end quote

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Speaker 2: Joe Biden's Warren crypto.

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Speaker 1: And there's one more.

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Speaker 2: It's become such a big deal that Mark Cuban is

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Speaker 2: actually said that you, mister Gensler, could quote.

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Speaker 1: Literally cost Joe Biden the election. What's your response to this.

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Speaker 3: I'm going to be easy with them, Maria. I don't

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Speaker 3: speak about elections.

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Speaker 1: You don't have a response to mister Cuban.

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Speaker 3: I just I just really look My role as a

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Speaker 3: securities regulator is chair of this great five thousand person

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Speaker 3: agency that oversees one hundred and twenty trillion dollar capital markets.

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Speaker 3: We are here to look out for investors, look out

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Speaker 3: for issuers, and we're appropriate to.

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Speaker 4: Be a cop on the beat. And we have a

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Speaker 4: set of rules that are pretty clear.

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Speaker 3: There's nothing inconsistent about crypto securities and the securities laws. Unfortunately,

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Speaker 3: there's a number of people that are non compliant with

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Speaker 3: the laws.

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Speaker 1: Let me ask it in a different way.

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Speaker 2: Are you surprised by the political movement we've seen around crypto?

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Speaker 4: Again? I mean, I'm a securities regulator.

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Speaker 3: I'm focused every day on that part of my job,

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Speaker 3: which is protecting the investors, looking out for issuers access

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Speaker 3: to markets, fair, orderly and efficient markets. And with all respect,

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Speaker 3: I hope your listeners undersaid that's my role.

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Speaker 4: Other people can speak about elections.

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Speaker 2: So the election is coming up, though, And although your

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Speaker 2: term although M agree, although your term goes beyond November fifth,

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Speaker 2: is there something you want to get done? Do you

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Speaker 2: feel like you're up against the clock to get something

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Speaker 2: done before the presidential election.

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Speaker 4: Look, it's such a privilege to be in this role.

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Speaker 4: I really mean it.

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Speaker 3: I can't believe I'm serving my third president and been

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Speaker 3: through Senate confirmation six times and all this.

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Speaker 4: I just can't believe that.

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Speaker 3: And every day I think is a privilege to help

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Speaker 3: the American public, our clients three hundred and thirty million Americans.

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Speaker 3: It's about chasing down insider trading. It's about making sure

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Speaker 3: that there's the proper disclosures, it's about implementing we still

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Speaker 3: have some significant things we just implemented this big transition

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Speaker 3: to having the clearance the settlement cycle to one day.

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Speaker 3: But we're also working on the implementation of our treasury

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Speaker 3: clearing rules. And our twenty seven trillion dollar treasury market is.

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Speaker 4: Way too jitterate.

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Speaker 3: It has fragility and jitters in at every couple of years,

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Speaker 3: and settling that down and sort of implementing that.

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Speaker 4: Set of rules.

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Speaker 3: But yes, there are still some rules that we proposed

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Speaker 3: and we have not yet adopted that we're working on.

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Speaker 3: But we're not doing it against a clock. We are

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Speaker 3: basically trying to promote these markets, enhance these markets on

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Speaker 3: behalf of the American public. And if I've honored to

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Speaker 3: serve through my term, which is through twenty six, great,

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Speaker 3: If it's earlier, that's democracy, democracy and action, and I

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Speaker 3: deeply believe in it. But we're going to do everything

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Speaker 3: we can for the American public.

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Speaker 2: I guess what you're insinuating there is that if we

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Speaker 2: were to see a Trump two point zero, you likely

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Speaker 2: would potentially be out of a job, election or not.

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Speaker 2: Timelines are not what is your number one priority at

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Speaker 2: this moment.

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Speaker 3: It's my number one prior already is the American public.

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Speaker 3: That's the client and and so that's who we represent.

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Speaker 3: It's of course implementing some of the rules that we've

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Speaker 3: already adopted. It's considering the public feedback on the rules

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Speaker 3: we propose and not adopted. But not against a clock.

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Speaker 3: It's your clock. It's like it's just it's, well, you

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Speaker 3: kind of run the field as well as you can

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Speaker 3: run the field, and when the ref costs the clock,

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Speaker 3: you see where you are. Just with all respect, and

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Speaker 3: of course it's also been a cop on the beat.

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Speaker 3: You know, half of our agency is examination enforcement. Another

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Speaker 3: ten or fifteen percent of our workforce reviews all these

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Speaker 3: disclosure filings and gives feedback to the issuing public.

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Speaker 4: And it's doing that well.

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Speaker 2: SEC Chairman Gary Ginsler, thank you so much for your time.

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Speaker 4: Thanks a. I'm the Rage