Yesterday, the Senate, in a vote largely along party lines, approved the nomination of Gary Gensler to be the new chair of the Securities and Exchange Commission. Gensler, a former Goldman Sachs executive who also ran the Commodities Futures Trading Commission during the Obama administration, is expected to lead the SEC in a different direction from that of former chair Jay Clayton.
Gensler’s appointment as the chair of the SEC breaks the 2-2 deadlock that resulted when Clayton stepped down following the Presidential election in 2020. Somewhat interestingly, Gensler’s appointment was approved only for the remaining portion of Clayton’s term – which ends June 5, 2021, though under existing rules, he may remain in the position without further Senate approval for up to 18 months following the end of that term. I don’t believe this signals that Gensler’s term will be a short one though, as the Senate has already calendared a vote on his appointment through June 5, 2026, and the Senate Banking Committee has approved him serving through that date also.
With Gensler now in the top seat, we should shortly see what his top priorities for the SEC will be during his term as chair. Early indications are that he will continue the recent focus of the acting chair of the SEC Allison Herren Lee, on environmental, social and governance disclosures, including those related to climate change and diversity. Some think he will also turn the attention of the SEC to political spending disclosures though that would likely require Congressional action, and if his time at MIT is any indication, it’s reasonable to expect some focus on digital currencies, including questions around the trading of bitcoin.
Recent media attention on the trading volatility of stocks like GameStop, issues around payments that financial services firms receive from broker-dealers to direct orders to those firms and the recent news about the massive financial losses of Archegos will almost certainly dictate that these areas recent attention as well.