Regulation
Gary Gensler on Regulation T+1, artificial intelligence and cryptocurrency regulation
The chairman of the United States Securities and Exchange Commission, Gary Gensler, discusses the transition to the new “T+1” regulatory cycle, the state of AI technology, market regulation, Congressional trade, regulation and more.
In a recent interview with CNBC, Gensler discussed the start of the T+1 settlement cycle, highlighting its benefits for investors. Gensler praised the collaborative efforts of exchanges, custodians and clearinghouses in making this transition smooth.
He explained that if a person sells shares on Monday, they will now receive cash on Tuesday, which is a huge improvement over the previous two-day settlement time. This improvement uses current technology to speed up transactions, bringing the process back to 1920s levels of efficiency.
He also expressed concern about the potential risk of conflicts of interest, fraud and over-reliance on some AI models, which could lead to systemic collapses in capital markets.
The SEC chairman emphasizes the need for competition between public and private markets, citing the U.S.’s much larger capital markets than the banking sector. Ensuring sufficient disclosure and protection against fraud and manipulation is essential to maintaining healthy competition.
Gary Gensler highlighted the importance of adequate transparency and regulation in cryptocurrency markets, highlighting that while exchange-traded products (ETPs) for Bitcoin and Ethereum are being approved, the broader cryptocurrency market still lacks critical protections for investors.
Gary Gensler emphasized that everyone, even 330 million Americans, must observe capital market laws, including those that prohibit trading on the basis of hidden inside knowledge.
The conversation concludes with a light-hearted discussion of the hypothetical existence of a “Cramer Coin” and its registration status, underscoring the broader theme of the importance of adequate regulation and disclosure across all financial products and markets.
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