Interview
They're Opening the Stock Market to Everyone. Here's What That Actually Means
- Private practice clients faced weekly subpoenas and regulatory pressure throughout 2021 and 2022, with expectations of ongoing opportunities and necessary guardrails in a dynamic market environment.
- The SEC plans a comprehensive review of the rulebook for the current year extending into the next, focusing on materiality, addressing the weaponization of corporate governance, and mitigating class-action lawsuit threats that inhibit public listings.
- Chairman Atkins intends to propose changes to reporting cadence regarding filer status to benefit smaller companies and aims to release a proposed rule this year redefining the accredited investor definition to include qualified purchasers and institutional purchasers.
- Efforts to broaden access to private funds are underway, including evaluating options to include 401(k) plans through coordination with the Department of Labor and Treasury Department to adjust standards for pension contributions.
- The SEC aims to serve as an active regulator targeting fraud and manipulative communications without imposing excessive restrictions on compliant entities, while also addressing gambling addiction risks among young men aged 18 to 30 through school-based education.
- Michael Selig anticipates legislation with the President will grant the CFTC broad authority over spot markets, enabling the implementation of rules for the crypto asset market and future-proof regulations for blockchain and AI innovations.
- To prevent duplication and turf battles, the SEC and CFTC plan a harmonized approach over the next couple of years involving a shared "super app," a memorandum of understanding for information sharing, and discussions on substituted compliance regimes for cross-jurisdictional products.
- The CFTC intends to issue guidance clarifying statutory limits on prediction markets to shift away from regulating by enforcement, while also aiming to return financial innovation to the US from offshore jurisdictions like the Cayman Islands and Bahamas.
- CFTC initiatives include establishing controls and customer protections to prevent fraud similar to the FTX collapse, alongside an educational strategy to ensure market participants are informed before engaging, and exploring risk accommodation for autonomous agents through specific guardrails like operating nodes.