Weekly Roundup

2023 Priorities: Last year, the SEC largely focused on regulating issues around ESG, cryptocurrency, Regulation Best Interest, and cybersecurity. Now, the agency’s regulatory priorities are paring down: the SEC announced that it will prioritize cybersecurity, ESG, and digital engagement in 2023.

NYSE Losses: Investors hurt by NYSE’s malfunction are unlikely to recoup their losses. Losses could amount to millions of dollars, and retail brokerages have submitted thousands of claims. According to experts, full recovery for retail investors is not likely due to procedural issues. An internal panel at NYSE will evaluate claims on a case-by-case basis.

Cyber Attack: Financial data group Ion Markets suffered a cyber attack that affected derivatives that trade on exchanges. The attack impacted post-trade processes, like trade matching and keeping track of risk and margin requirements. CME Group and Intercontinental Exchange both stated that several of their members were impacted. The Futures Industry Association, the CFTC, and the US Treasury department are now involved, working with affected parties, regulators, and other market participants.

IOSCO Principles: The International Organization of Securities Commissions added revisions around unexpected market disruptions, market access, high-frequency trading, and investor education. “The 24 revised Principles seek to support the physical commodity derivatives markets in providing their fundamental price discovery and hedging functions, while operating free from manipulation and abusive trading schemes.”

Ethics Amendments: The SEC proposed amendments to modernize its ethics compliance program. “I was pleased to support today’s proposal to strengthen, modernize, and optimize the SEC’s ethics requirements,” said SEC Chair Gary Gensler.

Climate Disclosures: Many expect the SEC to finalize and implement rules on climate-related disclosures within the year. The new disclosure rules would require listed companies to disclose information about their direct and indirect greenhouse gas emissions. The SEC’s plan plays a part in the growing awareness of ESG issues among public companies.

Lobbying Disclosures: Binance Holdings, the world’s largest crypto exchange, used the same lobbyists to pitchWashington lawmakers as its US affiliate Binance US. The discovery implies linkages between two organizations that have repeatedly claimed to operate independently. The disclosures come at a time when Binance US is seeking SEC to approve a $1bn purchase of the assets of Voyager Digital.

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

  • Nicole Elam, president and CEO of the National Bankers Association, spoke on this week’s Fintech [Study Hall] podcast about the ever-changing banking landscape, its impact on underserved communities, and the National Bankers Association’s agenda for 2023. 

  • Caroline Crenshaw, SEC commissioner, is calling for stronger disclosure requirements among companies that sell unregistered offerings. Crenshaw is concerned that private markets have grown too large, and that potential fraud has become harder for regulators to detect.

  • Jim Cramer, CNBC Mad Money host, said the benchmark S&P 500 could be approaching a pivotal moment. The S&P fell 1.3% to 4,017.77 on Monday ahead of a packed week of earnings. Cramer noted that if the S&P 500 can avoid a major dip this week, then the future looks optimistic.

  • French Hill, Congressman (R-Ark), will chair Congress’s new subcommittee dedicated to digital-asset policy. The subcommittee plans to focus on payments. Hill will focus on “creating a regulatory and legal framework for digital assets, including digital payments, that protects consumers and investors, while keeping America as the leader in FinTech and blockchain innovation.”

  • Todd Phillips, Phillips Policy Consulting Principal and former member of the CFTC’s Market Risk Advisory Committee, wrote an op-ed in MarketsMedia calling for Congress to reauthorize the CFTC, the federal regulatory agency that is charged with regulating derivatives. Phillips wrote that “the CFTC has consistently been at the forefront of identifying and working to address market changes—such as the use of financial derivatives, algorithmic trading, and cryptocurrencies.” He went on to say that reauthorization is an opportunity for Congress to take stock of the CFTC’s mission and markets and give the CFTC new authorities to address developing concerns.