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Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
The author is Managing Director of GTS, a business of manufacturing and owner owner
With a new president entering the Securities and Exchange Commission, the Trump administration has the possibility of bringing the regulations on American markets on a more foreseeable path.
The choice of President Donald Trump on Paul Atkins is a good start. He will have his hands full to disentangle the activist campaign of former president Gary Gensler at the dry while taking up a number of consecutive challenges. These include competition from foreign competitors, the revival of the flow of initial public offers and the need to create a regulatory framework for cryptographic assets.
Under the acting president Mark Uyeda, the SEC has already touched the field according to the creation of a new crypto working group led by Commissioner Hester Peirce. As indicated in the announcement of the working group in January, “to date, the SEC is mainly based on application measures to regulate retroactive and reactive crypto, often adopting new and not tested legal interpretations in progress road ”. In other words, the regulators invented themselves as and when.
By virtue of peopleler, the SEC continued what is known in a derivative manner as “application regulations”. Essentially, the SEC continued someone and then used the result as a new standard it applied to the rest of the industry. Gensler did not hesitate to unleash a Blizzard from the new regulations – 34 final basic rules, exceeding that of its three most recent predecessors of 36% on average, according to the payment on capital markets. But there was a lack of clarity on the crypto.
Thus, one of the real opportunities now for the SEC is to advance the dynamic cryptography industry by creating a reasonable regulatory framework for this. The lack of regulatory certainty has motivated many cryptocurrency exchange operations abroad, depriving the country with a potentially massive market and making even more difficult to share the cost of the application.
There are many open regulatory questions to occupy the working group on the Crypto of the SEC, but an obvious correction is linked to a financial product which has experienced massive growth: the cryptographic ETFs which follow the prices of digital currencies. Since these FNBs were finally approved last year by the dry after a long delay, they proved to be popular with investors. There are now more than $ 100 billion in Bitcoin ETF active only. However, current regulatory constraints have hampered efficiency on this market.
One of the main components of the FNB market is the creation and buy -back process for investments facilitated by brokers like my business. When we undertake this activity for traditional ETFs, we use the underlying titles to cover our exposure and provide effective prices. However, we are currently prevented from transforming in digital currencies underlying the cryptographic ETFs, and we must therefore count on less effective hedges.
It’s like a restaurant trying to prepare a meal with missing ingredients. They will have to spend more time and efforts to find substitutions, which could increase costs for their customers, and ultimately, the final product will not be the same as the original. The dry can solve this problem by providing clear advice on how brokers can be exposed to cryptographic markets.
Another area that the SEC should approach is a source of funding for cryptographic surveillance. One of the most exasperating aspects of the unleashing of the dry against the crypto is that it was paid by the participants on the traditional securities market in the form of “article 31” costs, which bear the name of ‘An article in the EXCHANGE ACT SECURITIES from 1934. These. are paid to the dry to compensate for government costs to supervise and regulate the securities industry. In the current environment, even if an investor does not want to have anything to do with the crypto, he always pays it. The crypto earlier is officially regulated, the earlier it will be able to share the cost of its surveillance.
There are countless other important problems for the new leadership of the SEC to attack the crypto markets and traditional securities, but what should encourage participants in the financial market and individual investors, is that It seems intention – as the formation of the crypto working group underlines – by returning to the historical approach to the dry regulatory dry which is deliberative, inclusive of the expertise of industry and data focused.
As I testified to the American Chamber of Financial Services Committee last year, the US stock markets are the world or world. However, we cannot take this position for granted. The new administration has the possibility of handing over the regulatory ship, and all signs indicate that they are advancing in this direction.
