[background noises] the Senate Committee on banking will come to order welcome back chair gensler. Markets to provide for their futures for far too long our markets advance regulators the answer to the interest of the powerful few on wall street, big banks and private Fund ManagersCorporate Executives looking to keep profits for themselves instead of investing in their workers and innovation and the american prosperity. New Technology Risk further concentrating power on wall street at the expense of americans fraudster use, Cyber Attacks deep fake Ai Technology to scan american savers based with that unfair Playing Field that favors entrenched wealthy interest over hardworking americans the sec has its work cut out for it to protect families whose hard earned savings are invested in the market. Many on wall street have suggested sec has been moving too fast recently. We have heard all of the complaints. I amov sure we will hear them again today for too many rules, too fastd too hard to comply with. But americas marketst are the greatest in the world because we have strong Investor Protection. Because we have effective b regulators at the sec and elsewhere who work to make sure we have transparent and honest markets that americans deserve it. We know all too well we dont have its wood regulators at the behest of a lobbyist and the politicians who always do their bidding ignore changes or are too slow to respond. It was 15 years ago this week the newman brothers collapsed putting us in the middle of a financial crisis because industry ran wild. Look at the private fools private equity and hedge fund manage tens of joints of dollars in assets. At the end of last year Pension Funds and endowments now some Retirement Savers. Private equity funds alone controls over between was incredible because i use that word sparing that we are between 15 and 20 of our whole Economy Private equity firms control that. That numbers going up every year. But all the americans to savingo savings are controlled by these firms have been able to get much information about how theyre using peoples money. They is comparable performance data, disclosure conflict of interest by fund manager. Americans have in the dark about all of it until now. The private funds rule will change that thank you and force them to tell people how much money the private equity firms are charging. It should be no surprise the groups that complain the proposal was too strong, too hard to comply with an unnecessary, weighted only days before running to the venue of choice the fifth Circuit Court ngof appeals of course its alws the fifth circuit the most extreme and partisan circuit in america and always same playbook we see over and over wall street corporate interests trying to use the courts to go around the public. By the companies trying to hide showings in stock buybacks for one thing. Sec update of corporate buyback disclosure will also provide muchneeded data and how executives are allocating corporate resources. That increase transparency will combine with our first ever stock buybacks together stop throwing trillions of dollars in buybacks and rich executives instead start investing and workers and an innovation for the commission took important steps to address fraud increase executive accountability under your leadership mr. Chair the sec finally took steps to complete two safeguards required under daughter frank the first erwas proposing the rule prohibiting conflict of interest in the market for mortgagebacked and assetbackea securities that sounds technical during the financial crisis of 2008 wall street bank predatory hedge funds but against the Housing Market because of billions inn damage. The second daughter frank provision requires companies to work to clawback compensation from executive who earn bonuses based on flawed results the committee has been working to enhance executive accountability by recently passing i think the Ranking Member for this for about a 21 two a bipartisan bill to hold Bank Executives responsible when they mismanage their banks. Look forward to passing the Senate Becoming law for the past year advance transparency by requiring companies to notify the market when they experience cyber attack we know this is a growing risk every industry. Now there are standards that ensure investors and policymakers know when they potentially devastating attacks occur. Scc continues to pursue enforcement action against all kinds of scam artists. Those who target the vulnerable and crypto frauds. More work tora do. We know its looking ahead at emerging risks posed by new technologies including Machine Learning and Artificial Intelligence. Must make sure brokers and Investment Advisors put customers first when they is new technology. This committee will be discussing the impact ofme ai wn Financial Markets and consumers in the coming weeks. Im eager to see sec finalize its Climate Disclosure rule there has been significant opposition to the proposal who would have expected otherwise. The transparency it will provide will be valuable to investors last week the Committee Heard testimony about the challenges the property Insurance Market the increasing climate events every year 151 billion or more events so far this year increasing all the time it is well documented. Puts workers at risk. It is clear why investors demand man information. When they lack transparency americans lose money that collapse was not alone every day before and after the collapse there is another crypto scam taking advantage in another few Million Dollars loss the problems that socks are everywhere and crypto. The failure to provide real disclosure and the risky bets with customer money that supposed to be safe it was just the biggest and the ugliest and adds up to billions of dollars. Meanwhile bad actors flocking to t crypto. Fund crime and Human Trafficking and terrorism we need to protect workers and families in these markets we need to clean up scams and fraud. Congress considers Digital Asset legislation but the scc is using its tool to correct on abuse and enforce the law. Our economy and markets move part sec must keep moving forward to put americas First Americans who work hard and scrimped to say for the family futuress deserved it to investor savings and markets that are fair andnd honest and transpare. Look forward to hearing more about how the sec and american workers. Think it mr. Chairman. Thank you chair for being with us today. When calling for this hearing since february 14 the Committee Held an oversight hearing on the crypto crash. A lot has happened since your appearance last september. Weeks print several things and called up the relevant held them accountable for the action. When it comes to the scc weve had to wait a whole year to speak with you in person. Complete and timely attention to inquiries is critical to ensuring independent agencies remain transparent and accountable to the American People. Yet sadly your agencys fallen short on this obligation to be transparent and responsive to oversight. I have serious concerns with the weight you are leaving sec. The u. S. Economy more specific their Capital Market system is a global Gold Standard one of our countrys greatest strategic and competitive advantages over our peers and our adversaries. However the United States can only retain these benefits to innovate, launch, and grow new job creating ventures americas Global Competitive edge is innovation and the american spirit to create. As the sec chair your goal should be to fuel in the marketplace expand the ability of americans from all walks of life. Whether that be Aircraft Mechanic in North Charleston or a farmer in fort dodge, iowa. To access a wide spectrum of options for the hard earned dollars without progrowth regulations we are limiting opportunities for our kids and our kids kids being able to take control of their own financial futures. Is why it is especially troubling that under your leadership the sec has failed to implement these progrowth roles. Instead your agency has turned out seemingly endless Assembly Line of new regulatory hurdles to capitol formation and Market Access. Let me go through some of those rules. The compliance burdens of your proposed Climate Disclosure rule are expected to quadruple the cost of being a Public Company. That is just for one single rule. Your tax on private markets as a is aprivate funds route for smal businesses and small and diverse managers out of the market ultimately limiting jobs and opportunities for many in the local economy. Meanwhile your proposed overhaul of equity Market Operations will harm Market Access for Retail Investors and increase firm capitol especially for small and mediumsize businesses. You have issued several proposals aimed at reworking the Regulatory Regime including mutual funds used by millions of americans while providinged paperthin rationale for why these reforms are needed. Despite it being a rule of Artificial Intelligence given excel spreadsheets is beyond the scope to ultimately stifle innovation. Finally and i certainly could go on with more your proposed revision to the current rules for safeguarding customer assets are so overreaching you place your fellow regulators at the cftc the fed and trevor at treasury between iraq and hard place. These proposals and rule makings on the capitol market system. Failed to conduct thorough costbenefit analysis much less look at the overall impact of these proposals that has limited the time the public can have to analyze and comment on these rules in the proposal. This is kind of like using all of your draft choices to pick a quarterback and forgetting about the offense of line. Rulemaking must be justified and supported bike the Economic Analysis which brings me full circle vertebral makings must be done and a thorough transparent manner which includes responsiveness to congressional oversight. Including the minorityre members of this committee. The American People have a right to know what their government is doing and your refusal to the constitutionally mandated oversight represents a dereliction of your duties to the American People. A few final thoughts before i close a few opportunities exist for all and are prioritized for opportunity for future generations than give americans in every corner of the United States the chance to better their economic standards and build generational wealth for its cleared of this administration, under the sec chairman is the preferred medicine to precede policy injury. This should not be the case. Look forward to your testimony in our discussion. Thank you Ranking Member scott. Well hear from gary with the chair of the securities and exchange commission. Chair please proceed. Thank you so much. And brown, Ranking Member scott, members of the committee it is so good to bemb back in front of you. And thank you for inviting me here today for its customers like to note my views are my own is chair of the sec im not speaking on behalf of my fellow commissioners or sec staff. Bird 90 years of federal security laws and our work to oversee them have played a crucial wall for the public in both good times and in times of stress. The Core Principles the u. S. Securities Market Regulation have contributed to economic success. I find Ranking Member scott and i probably agree on this. It really has contributed to our economic success and our geopolitical standing success of our Capital Market. At this Remarkable Agency we serve investors building for a Better Future and issuers on the other side of the market raising further innovations in their ideas. Its a 120dollar Capital Market s in total. Capture a threepart mission. It is to protect investors on one side facilitate capitol formation on the other whats in the middle . The markets the sec as a cop on the beat watching out for your constituents. Dedicated staff of thec agency does extraordinary work with limited resources in the face and significant and yes increase complexities. The headcount shrank from 2016 through last year we shrank a touch more than they were seven years ago less with the largest most sophisticated we cannot take this for granted. Even a Gold Medalist must keep training parade that is when we are updating our rules for technology and Business Models of the 2020. My written testimony details those efforts im sure well get into questions on this role or that climate, crypto and the like. I would like to put all in context we are updating our rules to promote efficiency, integrity and resiliency in the market. That is our goal. We do so with an eye toward investors and issuers alike to ensure the markets work for them rather than investorsss working for the market intermediaries. We are working to help lower costs, increase access and promote Financial Stability in each of the proposals we have made in the last two years, further thatpo threepart missin as laid out by congress. Our division of economic risk analysis provides robust Economic Analysis. It considers the cost. And the benefits as well as the effects on efficiency, and capitol formation we greatly benefit from public input regarding the economics, the policies themselves, and the Legal Authority. Now, in the last two years will provide the public ample time to comment with an average of 70 days to comment from the time we put a proposal and we publish it on our website. Since january of 22 we have actually set in place the minimum 600 days and sometimes 100 since its posted on the website when they close though we often continue to get additional comments for meetings and otherwise staff consider as well. Based on the feedback the Staffing Commission consider possible adjustments to the proposal. This process tends to take 12 24 months. And during that period of time, as we moved to possible adoption we only do so after we consider those comments and we do so based upon those comments or adjustments. Of the rule makings we made nearly all of them have changed their markable staff member with the resiliency in this committees question. On both sides it could be interested in your work ihold you accountable. The five minute rule starting questions. Thank you center brown i appreciate yourha courtesy. Drink gensler thank you for being here i appreciate it. You know, so many of the folks know someone who still involved the question is this. We dont need access to capitol but we do need access i wish we did not the sell grain needs regulation on them for so thats where you are at. Far too often inso my opinion i will get a survey as to how much grain i have raised. How much grain i have on hand. How much cattle, chicken, pigs, horses. Its a real pain in the butt. You get to do this over and over again. Surveys are not something i am real crazy about. Im busy trying to make a living. We have had previous conversations about making sure the proposed climate rule does not lead to burdensome requirements to add additionaliv workload in the neck and being generous when im saying paint and the neck to agriculture producers who do business with public created company. Which by the way is by far and away the vast vast majority of people in production. I appreciate you have been receptive to those concerns. We have discussed previously in wthis hearing that it is not te commissions intent to have farmers or ranchers in montana or any other state or in the other producers have to report on goods they sell to publicly traded companies. I want to sure that still stands true, is that right . What side does stand right sir. We oversee Public Companies pray that is it. One, we are not a climate regulator we are a securities regulator. In right now to give you an example of the top 1000 companiess by market cap of abot 80 make Climate Risk Disclosures. We are just trying to bring comparability to that we have heard not just from you but many farmers and ranchers across this greatt land. From small and Mediumsize Enterprises who have said we dont want to fill out the survey. And not somehow indirectly those private companies. You are fully aware it