Weekly Roundup

SIFMA Survey: SIFMA conducted a survey at its Operations Conference and found T+1 to be a top priority for attendees. T-1 landed above other priorities, including improving efficiency, automation, and the proposed regulatory changes to US market structure.

EDX Launch: Cryptocurrency exchange EDX Markets, which is backed by Citadel Securities, Fidelity Investments, Charles Schwab, GTS, and Hudson River has begun executing trades. EDX released a statement saying that the exchange has key differences in ways crypto exchanges typically operate. EDX is “noncustodial” and does not directly handle its customers’ digital assets, but instead runs a marketplace where firms execute trades and use the platform to agree on prices.

Robinhood to Buy X1: Robinhood Markets is buying fintech firm X1 for about $95 million. Trading activity on the platform has declined since the 2021 meme stock frenzy and the company is looking to diversify.

Oversight Hearings: The House Financial Services Committee held two oversight hearings of the SEC, with bipartisan support expressed for implementing Section 605 reform before other equity market structure reforms.

Reopened Comment Period: The SEC reopened the comment period for its proposed rule for position

reporting of large security-based swap positions that exceed certain thresholds. The comment period ends August 21, 2023.

SEC Binance Deal: The SEC and Binance reached a deal, which will allow its operations to continue while it battles fraud charges. The deal states that funds belonging to customers of Binance.US will go into a special digital repository only accessible to the US exchange.

DOD AI Strategies: The Department of Defense released an article highlighting its commitment to establishing a comprehensive set of policies to govern the development of autonomous weapon systems, ethical AI strategy, and the development of responsible AI strategies.

International AI Meeting: In a meeting with Bill Gates, Chinese President Xi Jinping expressed he is supportive of US firms bringing their AI technology to China. Xi is cautious of the risks associated with AI but believes China should use it to drive economic development.

SEC AI Regulations: The SEC is continuing to work on establishing rules to govern how wealth management firms can use AI when engaging with clients. Chair Gary Gensler said he is determined to change the way the SEC works with AI dominated markets.

White House AI Meetings: The White House Chief of Staff’s office is meeting weekly to discuss ways for the federal government to regulate the use of AI. The office is pushing for commitments from tech companies on combating potential challenges moving forward.

In the Mix: This Week’s Top FinTech Thought Leader

  • Chuck Schumer, US Senate Majority Leader, is calling for “comprehensive legislation” to regulate AI. Starting in September, Schumer will convene a “series of AI Insight Forums that will begin laying down a new foundation for AI policy.” Schumer said, “If the government doesn’t step in, who will fill its place? Individuals and the private sector can’t do the work of protecting our country.”

  • Kirsten Wegner, Modern Markets Initiative CEO, published an op-ed in Traders Magazine titled, “Policymakers Should Shelve Market Structure Proposals and Focus on What Really Counts for Retail Investors.” The piece highlights an MMI study illustrating that the US markets are the best they’ve ever been and discusses the areas that Chair Gary Gensler should focus on: crypto clarity, the future of AI, and cultivating bipartisanship.

  • Jason Paltrowitz, Executive Vice President at OTC Markets Group, spoke to Bloomberg about his markets outlook, retail investor landscape, and the path forward for IPOs. Paltrowitz noted that retail investors have become more cautious with their money since before Covid.