Hill Update – April 2023
While both Chambers of Congress spent the first two weeks of April on recess, they came back with a full schedule of hearings to close out the month.
SEC Oversight Hearing
The first hearing of the month was the House Financial Services Committee on SEC Oversight. This was the first time that SEC Chair Gary Gensler testified in front of the Committee with a Republican majority and it came with the predictable attacks on the Chairman and the SEC. Crypto was a headlining issue for the hearing, with the majority pushing back against the Chair’s work to reign in a lawless industry. And while crypto will continue to create headlines, it is important to remember that crypto markets represent a small fraction of US capital markets. Read more in Better Markets’ report on The SEC’s Excellent Record on Crypto. The Chair was also notably attacked on the pace of the SEC’s rulemaking. Better Markets has rebutted this claim before in a letter to the Chairman following similar attacks last year. Our letter not only highlights the importance of the rulemaking process, but also that Chair Gensler’s pace matches up with his predecessors.
Prior to the hearing, Better Markets released two important fact sheets, on the SEC’s budget and their recent market structure reform proposals. These fact sheets show that the SEC has lacked resources to grow with the markets, including markets like the crypto space with enormous enforcement challenges. The second fact sheet highlights the importance of the SEC’s rulemaking agenda and how their proposals will help retail investors and even the playing field. You can read our fact sheet on the budget here, and the market structure reforms here.
Capital Markets Hearing
On the following day, the House held a Capital Markets Subcommittee hearing entitled “A Roadmap for Growth: Reforms to Encourage Capital Formation and Investment Opportunities for All Americans.” The focus of the hearing followed similar themes to the Subcommittee’s previous hearings, and was a preview for a markup being held the last week of April. The Republican majority tried to point to barriers to raising capital and investing in private markets with the Democrats pointing to these rules being in place to protect Main Street investors from being ripped off in the private markets. Following on our recent fact sheet about the importance of a strong accredited investor rule, Better Markets released a fact sheet prior to this hearing that shows how securities offerings in the private markets harms investors by depriving them of important information that they would have received in a public offering. The bottom line is that these are important rules that protect investors. Be sure to read our full fact sheet here. For much more detail, read our full report here.
House Crypto Hearing
The House is continuing with their crypto hearings on the last days of this month. While they are happening after this newsletter is going out, we will be sure to recap them for you in next month’s newsletter. These hearings, in both the Financial Services and Agriculture Committees, aim to point out the current regulatory gaps in the crypto space. In advance of the hearings, Better Markets released a fact sheet that breaks down these issues from the side of the SEC as well as the CFTC. Be sure to read the fact sheet here and check back next month for a full run down of both hearings.