Weekly Roundup

Music Trading: Market maker GTS Securities has partnered with JKBX (“Jukebox”) to make investing in music rights accessible to the public. The new offering, which will allow fans to invest in music similarly to how they buy stocks, is expected to go live by the end of the year.

SEC Priorities: The SEC Division of Examinations announced its priorities for 2023: new investment adviser and investment company rules, RIAs to private funds, retail investors and working families, ESG, information security and operational resiliency, and emerging technologies and crypto-assets.

NYSE Recoup: The NYSE told clients it plans to cover all losses for orders posted or routed to NYSE during its malfunction last month. Loss-making trades triggered on other venues will not be covered. According to other firms, NYSE will only reimburse roughly 60% of the claims filed.

HFTs Edge: A new study by the UK Financial Conduct Authority found that high-frequency traders are better at handling a pick-up in volatility than banks. Yet, banks still perform better than HFTs on scheduled data releases and macroeconomic events.

Quadrupling Taxes: President Biden plans to propose quadrupling the 1% tax on stock buybacks that took effect in January. The hope is this would encourage companies to invest in their own growth instead of boosting shareholders.

Another Investigation: Crypto exchange Kraken is under investigation by the SEC over whether it offered unregistered securities to American clients. Following the recent FTX collapse, the result of this investigation could have rippling effects through the industry

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

  • Brian Walker, The CAP Group founder and CEO, stated that boards are not ready for SEC cyber regulations. According to analysis by The Cap Group, only 51% of Fortune 100 companies have a board director with relevant cybersecurity experience – and Fortune 200 and 500 companies come in even lower at 9%.

  • Nadia Schadlow, Hudson Institute Senior Fellow and former Deputy National Security Adviser for Strategy, wrote an op-ed in The Hill condemning the SEC for its consideration of a new rule that would expose investment funds to litigation for failed investments. She wrote that this “small rule change in Washington could inadvertently hobble our innovation edge and seriously erode our standing in the world.”

  • Hester Peirce, SEC Commissioner, spoke to CoinDesk about how the SEC has not done a good job as a crypto regulator. She stated that a lot of crypto activity is happening outside of the United States and “when U.S. persons participate, they won’t have the protection of the U.S. regulatory framework.”

  • Gary Gensler, SEC Chair, is considering scaling back the climate-risk disclosure rule. Under the proposed rule, public companies would have to disclose information about the climate risks their businesses face, as well as the carbon emissions of parts of their operations. Those in opposition cite that the changes this rule brings are unnecessary, burdensome, and costly.