Washington, D.C., April 18, 2023 – SIFMA today issued the following statement from president and CEO Kenneth E. Bentsen, Jr. on its concerns with the Securities and Exchange Commission’s (SEC) regulatory agenda:

“SIFMA, along with stakeholders representing a diverse array of professions and perspectives has raised concerns about the potential impacts of the SEC’s regulatory agenda.  Financial economists, legal scholars, and capital markets participants have identified flaws in many new rule proposals that, if not addressed, could have a range of negative effects on investors, issuers, and market operations.

“While we support some of the policy goals being pursued, we are deeply concerned that the potential cumulative and interactive effects of the numerous and overlapping proposals are not fully understood and have not been subject to sufficient cost-benefit analysis.  We have particular concerns about the impact that rule proposals, such as equity market structure reform, could have on investors, as they have the potential to make trading more costly.  Other proposals could make it harder and/or more expensive for public and private companies to raise capital and credit to invest in new plants and equipment, which negatively impacts economic growth.  Requiring public disclosure of sensitive trading and position information is likely to reduce incentives for market participants to invest in valuable research or engage in trading activity. Rapid public reporting of individual securities loans (within 15 minutes) and swap positions (within one day) could reduce liquidity by exposing positions to speculative and opportunistic trading. Similarly, expanding beneficial ownership and short position reporting could have a chilling effect on legitimate investment activities.  Shortening the settlement cycle, from T+2 days to T+1 day, is an undertaking we fully support, and in fact began working on in 2020, but the timeframe to complete all the necessary operational changes is unnecessarily brief.

“Rather than rushing to finalize dozens of new rules and continuing to make major policy changes through non-transparent methods, the SEC should focus its resources on the most time-sensitive priorities, conduct more robust economic analysis that accounts for cumulative and overlapping effects before moving forward with the most problematic proposals, and prioritize transparency and public engagement. These simple steps are essential for the SEC to accomplish its important mission.”

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SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development.  SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).