Gary Gensler, the head honcho of the Securities and Exchange Commission (SEC) believes that the time has come for the enforcement of new regulations as the markets and trade has changed especially during the pandemic. As new ways of trading activities are here to stay, there is a need to protect amateur investors and traders.
Many first time investors use apps like Robinhood for investment. They also join the crypto bandwagon which is unregulated and extremely volatile. They invest in what is termed as a special purpose acquisition company (SPAC). SPACs have become a means by which companies bypass the traditional way of going public.
Gary Gensler has taken up the gauntlet of protecting the small term investor by working to broaden the scope of the agenda of the SEC. His energy and the pursuit of both long term and short term goals has surprised Wall Street observers, academicians and others.
There are a few cracks in Rule 10b5-1 – a key insider trading rule.
– Gary Gensler (@GaryGensler) December 15, 2021
We proposed some changes:
1ï¸âƒ£ 4-month cooling off period for officers & directors
2ï¸âƒ£ End overlapping plans
3ï¸âƒ£ End protection for opportunistic canceling
4ï¸âƒ£ Improve disclosures on insider trading pic.twitter.com/LBXJFWUOd3
According to a report by NPR, James Cox said that he was “staggered” that the “agenda” was so robust and that there was so much energy behind it. The teacher of corporate and securities law at Duke University said that he thought that Gary Gensler not only worked “seven days a week” but that he thought that he worked “26 hours a day.”
Some of the items on Gensler’s agenda for the SEC to implement include the following:
A planned regulatory approach to cryptocurrency.
Potential restrictions on trade of their company’s stocks by executives.
Enhanced disclosures on corporate buybacks.
Forcing Wall Street to divulge more information so that there is transparency.
Increase in protection for average and small time investors.
Some Wall Street investors feel that the SEC chair is overreaching. They say that they worry that the U.S. would fall behind, while other markets take over global investments. They also think that new rules could dampen innovations.
Gary Gensler spoke of his vision to NPR which included what the SEC could do “for the American public–for young investors, for working families, for retirees along the way.” He said that they could “hopefully, make the markets a little better for regular folks.”
