At the CAS, the chair outlined the proposed securities and made reforms by Gary Gensler, whose aims are to reshape American stock markets. In the opinion of the commission’s head, Wagner, there is a lack of clarity on the market problems to be caused by the suggested changes and their relevance to the players therein.
Gary Gensler’s Proposed Reforms: New SEC Rules?
Wagner indicated in her report that the U.S. capital Markets are very liquid and competitive; she noted that 12 billion shares are traded daily on American stock markets. She pointed out that the onset of zero-commission trading in 2019 has seen growth in retail trading which is now estimated to account for between 10 and 20% of total trading volume in America.
This afternoon, I heard firsthand from market participants how the @SECGov's equity market structure rules will disrupt our capital markets, likely at the expense of everyday investors. The SEC needs modern market data before acting, and I heard that loud and clear today. pic.twitter.com/InJJ67gWxF
— Congressman Dan Meuser (@RepMeuser) June 27, 2024
According to Wagner, one should have analyzed this to enhance information for another minimum modification package before other proposals are presented. Wagner’s advice to the SEC was that they slow down so that they concentrate on implementing effective rules where there is enough evidence showing they are required and proper cost/benefit analysis is done.
According to her, US stock markets are a leading source of financial guidance for most Americans’ problems and the system should not be changed in such a way that could affect market stability.
The testimonies during the hearing were consistent with Wagner’s concerns, with the speakers claiming that the proposed changes might hurt the average retail investor. They emphasised the importance of maintaining factors that promoted competition while ensuring only little tampering is done.
Supreme Court Ruling: Changes in SEC’s Approach
At the same time, the Supreme Court made a recent ruling which gives SEC fraud case defendants in the SEC the right to trial by jury at the federal level, thereby implying that some complaints by the SEC cannot be handled in-house. This ruling alters the SEC’s enforcement approach because federal courts must now preside over civil fraud cases, introducing probable changes in how such instances are handled by the commission.
The above decision follows several court judgments that have constrained the powers of government bodies at the national level, among them the environment. The body that can control the stock markets; referred to as the SEC has begun to reduce in–house cases without waiting for the ruling and its destiny in terms of enforcement is being shaped through this recent resolution.
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