D.C.—Amanda Fischer, Policy Director & COO forBetter Markets, issued the following statement in connection with Better Markets’comment letterto the Securities and Exchange Commission (“SEC” or “Commission”) related to its order allowing unregulated exchanges to “tokenize” and make available for trading U.S. stocks:
“With the stroke of a pen, the SEC is attempting to negate 90 years of rules protecting investors in the stock market.By allowing unregistered exchanges to make available ‘tokenized’ U.S. equities, the Commission is threatening investors’ ability to get thebest prices for their trades, potentially undermining their votes in shareholder elections and complicating their ability to receive dividend payments.What makes this worse is that corporate America doesn’t even want this and has told the SEC that its plans may harm capital formation, open companies up to litigation, and complicate internal policies to prohibit insider trading.
“By allowing firms to create ‘shadow’ stocks that trade on systems outside of SEC regulation, the SEC is subordinating the interests of investors and public companies to the crypto industry. The new crypto stock venues will be exempt from rules requiring exchanges to display the best price available for stocks across all markets, rules around protecting customers’ private information, cybersecurity safeguards, insurance protection requirements, and even rules around funding SEC operations, whose costs will instead be shouldered by regulated firms in the stock market.
“The SEC unleashed its plans outside of the necessary notice and comment process, which allows all stakeholders the time to review and comment on rule changes that affect the market. Better Markets calls upon the SEC to rescind its ‘innovation exemption’ and propose any changes of this magnitude within the law and subject to full stakeholder input.”
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more.To learn more, visitwww.bettermarkets.org.
