The United States House Financial Services Committee will hear how the Securities and Exchange Commission is changing its oversight and rules to keep pace with technological advancements, including cryptocurrencies and artificial intelligence.
SEC Chair Gary Gensler is set to outline how the U.S. securities regulator is updating its rules to align with “technology and business models of the 2020s.” As is customary, Gensler’s opening remarks have been published ahead of the Sept. 27 hearing, outlining the SEC’s wider oversight of securities and exchanges in the United States.
There is particular interest in the SEC’s approach to the cryptocurrency sector, which has copped criticism for its “regulate-by-enforcement” approach that has been criticized for quashing innovation and adoption in America.
Gensler will directly address two areas of emerging technology, namely predictive data analytics and cryptocurrencies. The SEC chair is set to stress that investors and issuers involved in “crypto asset securities markets” deserve protections afforded by securities laws.
Referring to the establishment of the 1933 Securities Act, Gensler said that the U.S. Congress made a decision to include a list of more than 30 items in the definition of a security, including the term “investment contract.”
“As I’ve previously said, without prejudging any one token, the vast majority of crypto tokens likely meet the investment contract test.”
Gensler is set to tell the House Financial Services Committee that the SEC’s view that most cryptocurrencies are subject to securities laws also necessitates that intermediaries such as exchanges, brokers and dealers must comply with these laws as well.
The SEC chair suggests that the wider industry has been guilty of “wide-ranging noncompliance with the securities laws,” which has led to a number of enforcement actions. Gensler added that the SEC has looked to address the cryptocurrency “security markets” sector through rulemaking.
This included a reopening release published in April 2023 that reiterated the applicability of existing SEC rules to platforms that trade cryptocurrencies, including decentralized finance (DeFi) protocols. Included in the release were further guidelines for systems that would fall under a new, proposed exchange definition.
“While our current investment adviser custody rule already applies to crypto funds and securities, our proposal updating it would cover all crypto assets and enhance the protections that qualified custodians provide.”
According to the SEC chair, predictive data analytics and artificial intelligence have brought about a “transformational age,” driving efficiencies across the economy. The potential of the technology stands to increase financial inclusion and user experience, but it also poses risks of exploitation.
“This also raises the possibilities that conflicts may arise to the extent, for example, that advisers or broker-dealers are optimizing to place their interests ahead of their investors’ interests.”
Gensler’s address also notes an SEC proposal in July 2023 that would require firms to analyze conflicts of interest arising from the use of predictive data analytics to interact with investors. These potential conflicts would need to be eliminated or neutralized by the firms concerned.
It remains to be seen whether Gensler will be drawn to comment on ongoing legal battles with Coinbase and Binance.US, two U.S.-based cryptocurrency exchanges that the regulator has charged with a litany of alleged securities laws violations.
Lucy Powell’s had quite the political comeback. Sacked from cabinet by the prime minister but weeks ago, she’s back with her own powerbase and voice at the top of the party as the deputy Labour leader.
She was not Keir Starmer‘s choice and, while the prime minister was quick to embrace her on Saturday as the result was announced, he is probably right to feel some unease about the outcome for a few different reasons.
For in Powell, the party has a new, alternative figurehead that sits outside of the government machine.
Image: The PM congratulates Lucy Powell after she is announced as new deputy leader. Pic: PA
She ran a campaign in which she pledged to be the voice of the membership to the leadership and the membership picked her. She will have serious influence on the National Executive Committee, and sit in the political cabinet.
What she won’t do is return to the cabinet table, which means that she has power and profile, but will remain an independent voice, free from collective cabinet responsibility.
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As I understand it, Powell doesn’t want to destabilise the leadership – for now at least.
She will take a submarine approach when it comes to interventions around government policy rather than offering a running commentary on Starmer’s government and choose her battles.
That way, when she does weigh in, she is harder to ignore.
She could also over time become a lightning rod for discontent should the party’s fortunes remain as parlous as they are now.
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5:27
Powell aims to unite Labour Party
On Friday, Labour suffered a cataclysmic defeat in the Caerphilly by-election, coming third in a seat it has held for over a century as Labour endured their biggest ever drop in support in a Welsh by-election.
It’s a terrible omen for next May’s Sennedd election. Labour have been the governing party in Wales since the Senedd’s beginning in 1999. That could be about to change.
When I asked Keir Starmer about the loss on Friday, he didn’t try to deflect, saying: “I’m deeply disappointed by the results.”
When I asked him if it was a gut punch, he said: “I’m not going to suggest otherwise. I spoke to the first minister on Saturday morning, and clearly we need to reflect and regroup, and double down on the delivery, in Wales. And we clearly need to do much more.”
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2:15
Phillipson: Powell has my full support
Powell’s position now is that the party needs to pull together, get campaigning and try to build support with their voters.
But she is equally clear that this has to be down to delivery of the “national renewal” Labour promised voters in the election of 2024.
There will surely come a point, further down the road, where this new deputy leader will become more robust in her critique of the government if it fails to deliver and the party suffers.
This race has also exposed the ugliness in a party that is uneasy with its leadership and seems intent on infighting.
The constant briefing wars that emanate from Number 10 cascade down in what has been, at times, a dirty fight.
Lucy Powell accused Bridget Phillipson’s team of “throwing mud” and briefing against her in the Labour deputy leadership race on our Electoral Dysfunction podcast, while Phillipson also said she was at the sharp end of vicious smears.
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For all the talk on Saturday for coming together and unity, it is hard to see that materialising while doubts persist over Starmer’s leadership and while rivals, such as Powell’s close ally Andy Burnham, are waiting in the wings.
There is also the big question of apathy. Only 16.6% of party members, trade union members and affiliates chose to vote in this election, against 59% in 2020.
This is partly distorted because in the last leadership election, members were voting for both the leader and deputy leaders. But what it also suggests is disengagement from the wider Labour movement.
In 2020, there were 552,000 party members eligible to vote, out of a total membership which stood at 782,000, including union-affiliated members who are perhaps less likely to cast a vote.
This time around there were 970,000 eligible voters – but the Labour Party did not reveal how many actual party members cast a vote.
This might be because membership figures are dropping, and it didn’t want to reveal that information. At the end of last year, party membership stood at 332,000, which is around 200,000 members less than the end of 2019.
For now, Powell insists that she and Starmer will work as a team and the message from both Powell and the PM following her victory is that all of those party must put its shoulder to the wheel to try and see off the threat of Reform.
She is undoubtedly starting out as the party’s campaigner in chief, but I suspect she may become a far more critical – and dangerous – voice, if Starmer looks like he can’t get the party in good enough shape to win the next general election.
Lucy Powell has been elected as the deputy leader of the Labour Party.
But who is she and what does she stand for?
Powell began her career in politics working for Labour MPs Glenda Jackson and Beverley Hughes.
She then worked for a pro-EU campaign group.
After that, she ran Ed Miliband’s successful Labour leadership campaign and was his deputy chief of staff until she was elected as the MP for Manchester Central in 2012.
She has been at the forefront of Labour politics for over a decade, serving under Ed Miliband, Jeremy Corbyn and Keir Starmer.
After Labour won the last general election, she was appointed as the leader of the House of Commons in Starmer’s cabinet.
But last month she was sacked in the cabinet reshuffle and came to be seen as the anti-Starmer candidate.
During the deputy leadership campaign, Powell promised to “provide a stronger, more independent voice” for members of the Labour Party.
And in her acceptance speech, she said the government hadn’t been bold enough, and that it needed to step up.
So how much of a problem is she going to be for Keir Starmer?
Her new role – and being outside the cabinet – means she will be free to criticise the government, which could make life more difficult for the prime minister.
Powell has been outspoken about her desire for the government to lift the two child benefit cap – and also called for the country to work for the many and not the few – a Corbyn-era slogan – and that Labour must stop handing the megaphone over to Reform and letting them run away with it.
Starmer will be conscious that an MP he sacked not long ago is now in a powerful role able to speak freely and attack his decisions.
But Powell is not free from her own controversies.
In May, Lucy Powell called grooming gangs a dog whistle issue – something she later had to clarify after it caused outrage among campaigners and opposition parties.
She also vocally defended Labour’s unpopular cut to winter fuel allowance while in cabinet, before the government then U-turned on the policy – she then criticised the proposed welfare cuts after she was sacked from government.
Powell insists she wants to help Keir Starmer, providing constructive criticism and a voice for Labour members.
“Division and hate are on the rise. Discontent and disillusionment widespread.” What she meant: The Labour government has been a huge disappointment.
“The desire for change is impatient and palpable.” What she meant: You’ve had 16 months to deliver change – voters are saying, “Get on with it”.
“We have to offer hope, to offer the big change the country’s crying out for.” What she meant: Stop tinkering. Get more radical. You’ve got a huge Commons majority, after all.
“We must give a stronger sense of purpose, whose side we’re on and of our Labour values and beliefs.” What she meant: We’re not doing enough for working people or tackling inequality.
“People feel that this government is not being bold enough in delivering the kind of change we promised.” What she meant: Our voters are deserting us because they don’t see change.
“I’ll be a champion for all Labour values and boldness in everything we do.” What she meant: Watch out! I’m going to hound you and hold your feet to the fire!
“We won’t win by trying to out-Reform Reform, but by building a broad progressive consensus.” What she meant: Stop the lurch to the Right on immigration. We’re better than that.
“It starts with wrestling back the political megaphone and setting the agenda more strongly.” What she meant: We need to sharpen up our communication and selling our message.
“We’ve let Farage and his ilk run away with it.” What she meant: The Reform UK leader is running rings round us in communicating and campaigning. We’re too sluggish and flat-footed.
“For too long the country and the economy has worked in the interests of the few and not the many.” What she meant: Winter fuel payment cuts were a disaster and the two-child benefit cap has to go.
“Trickle down economics hasn’t worked.” What she meant: No more tax cuts for the rich. It’s time for a wealth tax, for example, to redistribute wealth.
“Life has just got harder and harder, less and less secure in work, in housing, in making ends meet.” What she meant: We’re failing to tackle the cost of living crisis and housing shortages.
“The deep-seated inequalities that have widened in wealth in regions in class in health need fundamentally redressing.” What she meant: We’re failing to look after our “red wall” voters.
“Re-unite our voter coalition and re-unite the country.” What she meant: Start governing for everyone, urban and rural, rich and poor, North and South. Stop neglecting poorer regions.
“We need to step up.” What she meant: For goodness sake, sort out the chaos in 10 Downing. Stop blaming aides and civil servants and sacking them. Get a grip!
Members and affiliates “don’t feel part of the conversation or party of the movement right now. And we have to change that.” What she meant: Stop ignoring and alienating activists, MPs and unions.
“Unity and loyalty comes from collective purpose, not from command and control.” What she meant: Stop the control freakery in parliament and party management. It’ll backfire.
“Debating, listening and hearing is not dissent. It’s all strength.” What she meant: Listen to your backbenchers and stop suspending them when they vote against policies like welfare cuts.
“As your deputy, my commitment is to change the culture.” What she meant: I’m going to stand up for rebels and critics and force you to ditch the control freakery and bad decisions.
“At the election 16 months ago the British people voted for change. I’m here to do everything I can to make that change a reality.” What she meant: Raise your game, or else!
She said it all with a smile, but there was menace there.
As deputy leader, Lucy Powell was always going to be a critical friend. So there you go, prime minister. Here’s 20 things you need to do for her to be more friend than critic.