LISTEN HERE:
House Republicans have introduced a bill to add a sixth commissioner and restructure the Securities and Exchange Commission (SEC). The new bill, called SEC Stabilization Act, aims to remove Chairman Gary Gensler from his post, and prevent any political party from having more than three seats on the SEC.
According to Republicans, Gensler has abused his power for a long time under the current SEC structure. They argue that U.S. capital markets must be protected from a tyrannical Chairman, including the current one.
The bill was introduced by Rep. Warren Davidson from Ohio and House Majority Whip Tom Emmer from Minnesota. Davidson, in a statement, said that real reform was needed to fix the ongoing abuse of power and ensure protection that is in the best interest of the market for years to come.
He stated that Gensler had a “long series of abuses that have been permitted under the current SEC structure.” It is time to fire Gary Gensler as Chair of the SEC, he added.
The SEC Stabilization Act includes several changes. In addition to removing the Chairman, it would restructure the SEC to redistribute power from the Chair to other commissioners. According to the Act, commissioners would continue to have rulemaking, investigative, and enforcement authority but would be subjected to staggered six-year terms.
Under the new structure, no political party would be allowed to control more than three seats on the commission. The SEC Stabilization Act’s structure is similar to that of the Federal Elections Commission (FEC).
House Majority Whip Tom Emmer’s bill would restructure the commission by ensuring that no political party ever controls more than three seats. His proposed bill proposes a structure similar to the Federal Elections Commission (FEC).
By having a balanced commission, Emmer believes that it will avoid future abuses of power like those seen under Gensler. In a press release, Emmer stated that the current SEC structure allowed abuses of power to go unpunished for too long.
Republicans have long criticized Gensler’s handling of the SEC, particularly his approach to cryptocurrencies. Before joining the SEC, Gensler was known to have knowledge when it came to cryptocurrency regulation.
Their criticisms clash with Gensler’s recent actions where he came out in support of digital currencies and their underlying technology. Gensler also has big plans for the SEC that would include strengthening regulation over cryptocurrencies and increasing oversight for corporate America.
Democrats, however, have a different view. They see the SEC’s increased focus on environmental, social, and governance issues (ESG) as necessary regulation. Regulating financial businesses in areas like climate change, diversity, and human resources, is mandatory for the SEC to perform its duties properly.
They also point out that Gensler has brought transparency and accountability when it comes to digital currencies’ regulation.
While Republicans argue that the left-leaning Gensler has a political agenda, Democrats counter that those on the political right are simply trying to avoid regulation of the financial industry.
For years under the SEC, the financial sector often went unchecked and brought on failures such as the 2008 Financial Crisis. With Gensler’s focus on ESG issues, regulation will become a crucial intervention if Republicans decide to change the SEC structure.
The SEC Stabilization Act would be the biggest restructuring of the SEC since the 1990s. It is therefore anticipated to come with a lot of both positive and negative ramifications. There are fears from Democrats that the bill would jeopardize Gensler’s plan to bring cryptocurrencies under tighter regulation.
At a time when cryptocurrencies are becoming more prevalent, regulating them is essential. The financial industry, including cryptocurrency trading, has suffered from many scandals that left many people disillusioned.
Republicans argue that they are not against cryptocurrencies as such; they’re just unhappy with the current SEC Chairman’s handling of the issue, among others. Restructuring the SEC, they believe, will help avoid politicians like Gensler from having so much influence.
Republicans’ view is that Gensler has significant shares in Ethereum, a digital cryptocurrency, and wonder if this might have influenced his actions. The removal of the Chair will enable a fairer decision on digital currencies regulation.
The bill faced immediate pushback from the Democrats. They pointed out that Gensler had brought a lot of transparency into the SEC’s workings and was working to protect investors.
Democrats worry that the bill’s implementation will lead to conflicts of interest between the Commissioners and increase the Commission’s politicization. They argue that the current SEC structure has already tried and tested guidelines that have brought success to financiers and investors.
Republicans charge that the SEC has become too large to be functional without major restructuring. The SEC was established to protect investors and promote market integrity but had become a bureaucracy that deterred innovation and growth.
Republicans, particularly since they are more conservative, believe that the SEC needs to be downsized so that it can adequately carry out its mandate, without the unnecessary bureaucracy.
The SEC Stabilization Act’s proposed restructuring is therefore touted as a win-win proposal that will ensure the SEC is adequately staffed and balanced.
With no one party controlling more than three seats, it is believed that the SEC can now focus on the critical issues that require its attention. The SEC would become more efficient, with less bureaucracy and greater transparency.
The SEC Stabilization Act has been received differently by the public. While the Democrats accuse the Republicans of trying to overturn important regulatory progress, the Republicans think they are trying to stop a party that is using regulation as a political weapon.
According to the Republicans, Gensler’s views on cryptocurrencies are hindering economic growth and innovation. Conservatives across America, especially, are looking to see the SEC structure change to reflect current concerns rather than follow past conventions.
The SEC Stabilization Act has generated intense debate on the Capitol Hill, and support for it falls along partisan lines. Republicans want the SEC restructured, while Democrats believe the current structure works.
Interestingly, bitcoin and other cryptocurrencies are a topic that all US politicians have been talking about. Despite political differences, the adoption of cryptocurrencies and blockchain technologies is a matter that politicians on Capitol Hill have been exploring.
It’s up to Congress to decide whether to approve the SEC Stabilization Act and restructure the SEC. Democrats have a majority in both the House and the Senate, which means that the SEC Stabilization Act is unlikely to pass a legislative process controlled by the Democrats.
Republicans are eager to change the SEC structure, and who knows, this could gain them some ground during the next election cycle.
The proposed restructuring of the SEC will remain a hotly debated topic in the financial world, and the question of whether the SEC should be restructured is far from resolved.
The future of cryptocurrencies’ regulation, too, remains a hot topic that will shape the security exchange commission for years to come. Regardless of whether the SEC was restructured or remained the same, cryptocurrencies would continue to affect the way the securities market operates.