SEC Chair Gary Gensler on Oct. 21 touted his agency’s work modernizing the equities markets and said new rules will help lower risk and costs.
In a speech at the Securities Industry and Financial Markets Association’s annual meeting in New York, Gensler highlighted a rule package adopted last month that, among other things, will allow most U.S. stocks to be priced at half-penny increments, reduce the access-fee caps for protected quotations of trading centers and increase the transparency of exchange fees and rebates.
Gensler said the rules will help drive greater efficiency, competition and fairness in the markets.
He also mentioned the U.S. shift in May to a shorter securities settlement cycle. The SEC in February 2023 had approved a rule to accelerate the settlement cycle to T+1 — settling a trade one business day after it is executed — from T+2, or two business days.
And he spotlighted a December rule package that includes provisions to mandate covered clearing agencies have policies and procedures in place to require their members submit various transactions, such as repurchase agreements, for clearing.
Gensler noted that the package begins to go into effect in March and said the SEC is working with market participants to ensure a smooth implementation.
“I feel very confident in the market participants, and the official sector and the clearinghouses to do what they need to do,” he said.
Separately, SIFMA President and CEO Kenneth Bentsen Jr. asked Gensler about the SEC’s enforcement focus on firms’ off-channel communications, such as staff members' business-related texts and WhatsApp messages.
Since December 2021, the SEC has settled charges with more than 100 firms that resulted in more than $2 billion in penalties for failures to maintain and preserve electronic communications, according to an SEC tally. Some stakeholders have criticized the SEC for holding firms to an expectation of perfection with respect to off-channel communication policies.
In response, Gensler said preserving books and records is important to control risk at firms.
“It’s not about perfection or something,” Gensler added. “We really found hundreds of people at dozens of firms were just blowing right past the rules that even their firms had in place. So we try to, with these settlements, move the market back to the right ZIP code.”
