Markets
Gary Gensler on T+1 Settlement, AI and Crypto Regulation
U.S. Securities and Exchange Commission Chairman Gary Gensler discuss the transition to the new ‘T+1’ settlement cycle, the state of AI technology, market regulation, Congressional negotiation, regulation, and more.
In a recent interview with CNBC, Gensler discussed the start of the T+1 settlement cycle, emphasizing its benefits for investors. Gensler praised the collaborative efforts of exchanges, custodians and clearinghouses to make this transition smooth.
He explained that if a person sells shares on Monday, they will now receive money on Tuesday, which is a huge improvement over the previous two-day settlement deadline. This improvement uses current technology to speed up transactions, returning the procedure to the efficiency levels of the 1920s.
It also expressed concern about AI’s potential for conflicts of interest, fraud and over-reliance on some models, which could lead to systemic disruptions in capital markets.
The SEC Chairman emphasizes the need for competition between public and private markets, citing the United States’ much larger capital markets compared to its banking sector. Ensuring sufficient disclosure and protection against fraud and manipulation is critical to preserving healthy competition.
Gary Gensler emphasized the importance of proper transparency and regulation in crypto markets, noting that although exchange-traded products (ETPs) for Bitcoin and Ethereum are being approved, the largest crypto market still lacks critical investor protections.
Gary Gensler highlighted that everyone, even 330 million Americans, must observe capital markets laws, including those that prohibit trading based on hidden insider knowledge.
The conversation ends with a light-hearted discussion about the hypothetical existence of a “Cramer Coin” and its registration status, emphasizing the broader theme of the importance of proper regulation and disclosure across all financial products and markets.
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