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 Is the SEC Planning a Push-Out Pull Back?
As we noted, SEC Chairman Gensler’s written Senate Banking testimony included a short – but very significant – statement prioritizing Commission review of key fixed-income market sectors. This did not come up at the hearing (see Client Report INVESTOR18), which focused on hot partisan issues such as climate risk and cryptoassets. However, the extent to which the SEC renews efforts to govern fixed-income activities it now thinks too far outside its reach has significant strategic implications, most immediately for large banks that might find key underwriting and capital-markets activities under additional standards and greater enforcement risk. In this report, we assess what Mr. Gensler contemplates for the corporate, muni, and asset-backed securities (ABS) markets, revisiting the “push-out” battles the Commission largely lost over a decade ago to evaluate whether the Fed could or would defend banks again from demands that key activities register with the SEC.

PUSH-OUT14.pdf…

Gensler Stands Firm on Crypto, Climate, MMF, Gamification Rules

As is often the case, Senate Banking’s hearing today with SEC Chairman Gensler did not touch on the fixed-income structure questions highlighted in his written testimony even though these could be among the most consequential for long-term capital-market regulation and the balance between the Fed and SEC in this key arena.  Instead, the session focused largely on consequential hot-button questions such as the SEC’s plans for climate-change disclosures and cryptoassets.  Here, partisan differences were again on vigorous display, with the sharp divisions between Chairman Brown (D-OH) and Ranking Member Toomey (R-PA) making it clear that regulatory and enforcement actions — not statutory clarification — will set policy until at least the next Congressional election.

INVESTOR18.pdf…