The U.S. Securities and Exchange Commission Chair, Gary Gensler, discusses the transition to the new ‘T+1’ settlement cycle, the state of the AI technology, market regulation, Congressional trading, regulation, and more.
In a recent interview on CNBC, Gensler discussed the start of the T+1 settlement cycle, emphasizing its benefits to investors. Gensler praised the collaborative efforts of stock exchanges, custodians, and clearinghouses in making this transition smooth.
He explained that if a person sells shares on Monday, he will now receive cash on Tuesday, which is a huge improvement over the prior two-day settlement time. This improvement uses current technology to speed transactions, returning the procedure to the efficiency levels of the 1920s.
He also expressed concern about AI’s potential for conflicts of interest, fraud, and over-reliance on a few models, which might lead to systemic breakdowns in the capital markets.
The SEC Chair emphasizes the necessity of competition between public and private markets, citing the United States’ much larger capital markets compared to its banking sector. Ensuring sufficient disclosure and protection against fraud and manipulation is critical to preserving healthy competition.
Gary Gensler stressed the significance of proper transparency and regulation in the crypto markets, noting that, while exchange-traded products (ETPs) for Bitcoin and Ethereum are being approved, the larger crypto market still lacks critical investor protections.
Gary Gensler highlighted that everyone, even 330 million Americans, must observe capital market laws, including those prohibiting trading on hidden insider knowledge.
The conversation concludes with a lighthearted discussion about the hypothetical existence of a “Cramer Coin” and its registration status, emphasizing the broader theme of the importance of adequate regulation and disclosure in all financial products and markets.
Also Read: Gary Gensler Says Crypto Markets Need Disinfectant
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