Weekly Roundup

US Equities Markets are the Most Deep and Liquid in World: At a Congressional hearing this week, Chair Ann Wagner (R-MO), House Financial Services Committee, Capital Markets Subcommittee, noted that the US boasts the world’s most deep and liquid capital market. She cautioned that the SEC should “exercise the utmost diligence” in rulemaking to “narrowly address known market deficiencies without inadvertently causing harm or disruption.”

Optimism in Investing: Retail investor participation remained high, with data pointing toward optimism in investingto achieve financial goals, and 61% of Americans owning stock, either directly or indirectly through an IRA, pension, or 529 plan, the highest since 2008.

China and India Lead in IPO Market: Data indicated that China and India outpaced the US at number of IPOs for 2023 so far. The countries with the highest number of IPOs as of Q3 2024 were China  and India, at 204 and 150 IPOs, respectively. The US trailed behind at 120 IPOs as of the start of Q3, with 76 IPOs on NASDAQ.

High Interest Rates Drag VC Market: Higher interest rates are reportedly placing pressure in the VC ecosystem, with increased pressure on startups to generate revenue sooner.

Artificial Intelligence (AI) Executive Order: Focus on artificial intelligence continued, with President Joe Bidenissuing an executive order directing various federal agencies to act upon key priorities and set firm deadlines surrounding AI regulation issues. Some industry advocates called for further specificity, with industry advocates such as Sam Altman, co-founder of ChatGPT, earlier calling for creating a “licensing regime” for the most powerful AI models.

SBF Awaits Verdict: Juror deliberation has begun in the case against FTX founder and former CEO Sam Bankman-Fried. Bankman-Fried faces seven counts of fraud and conspiracy associated with the collapse of the crypto exchange.

New Treasuries Rules: The SEC is expected to finalize a rule in the coming weeks that would reshape the treasuries market by requiring repurchase agreements to be cleared by a central authority. Several key market participants have already raised concerns that this new policy could lead to increased costs for retail traders.

CFTC Whistleblower Pay Out: The CFTC announced this week that the agency received 1,530 tips and paid out over $16 million to various whistleblowers this year. The department’s statement highlighted the number of tips that were related to stakeholders within the crypto industry and noted that two of these tips led to successful enforcement cases.

SolarWinds vs. SEC: The SEC filed a first of its kind lawsuit against SolarWinds and its Chief Information Security Officer, Timothy Brown, claiming that in the midst of a cyberattack on the U.S. government, the software company defrauded investors by concealing various cybersecurity weaknesses. SolarWinds has publicly claimed that this unprecedented action from the agency is “unfounded” and could jeopardize national security.

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

  • Chris Brummer, Faculty Director at the Institute of International and Economic Law, is scheduled to kick of next week’s DC Fintech Week.

  • Christy Moccia, Chief Compliance Officer at Clear Street, spoke to Markets Media about her concerns over various new SEC rule proposals related to equity market structure. “The SEC has been very active the last couple of years, and they have put forth many different kinds of proposals,” said Moccia. “For some of these, implementation will involve additional pass-through costs to the buy side.”

  • Ripple CEO Brad Garlinghouse responded to comments from former SEC Chair Jay Clayton in which he stated during an interview with CNBC that the SEC should only be pursuing legal action against companies that have clearly violated existing regulations. Garlinghouse fired back by calling the comments hypocritical, saying, “as a reminder, Jay Clayton brought the case against Ripple, me and Chris Larsen. And left the building the next day.”