SEC Chair Gensler to Defend Climate, Crypto Plans Before GOP-Led Panel
Summary
- House Republicans and industry groups say the SEC chair’s agenda shows regulatory overreach
Securities and Exchange Commission Chair Gary Gensler is set to defend his regulatory agenda Tuesday before a House panel that has grown hostile to his plans under Republican leadership of the committee.
“The SEC is the cop on the beat watching out for your constituents," Mr. Gensler said in prepared remarks for the hearing before the House Financial Services Committee. He framed his plans as necessary to protect investors and markets in an era of rapid technological change and emerging risks.
Among other initiatives, Mr. Gensler has moved to mandate climate-change disclosures from public companies, boost regulation of private equity and hedge funds, overhaul the way stock trading works, and apply SEC rules to cryptocurrency-trading platforms.
Many public companies and industry groups have pushed back against Mr. Gensler’s plans with voluminous comment letters and, at times, legal threats. A veteran policy maker tapped by President Biden to run the SEC, he faced limited opposition from Congress while Democrats were in control.
After the GOP won the House in the November midterms, panel chairman Rep. Patrick McHenry (R., N.C.) said he planned to summon Mr. Gensler to testify before the Financial Services Committee “early and often."
Mr. McHenry has cast Mr. Gensler as an overreaching regulator. He has said the SEC’s proposal to require public companies to disclose information about climate-change risks and greenhouse gas emissions, for example, shows progressives “using our institutions to force their far-left ideology on the American People."
Mr. Gensler said in his statement that hundreds of companies are already making climate-related disclosures because many investors want them. The SEC’s goal is to make such information more consistent and comparable, he said.
Private funds, Mr. Gensler said, have grown in size to surpass the commercial banking system, with more than $25 trillion of gross assets under management. In addition to managing money for teachers’ and firefighters’ pensions, such entities can pose risks to financial stability by using leverage, he said.
Ahead of the hearing, the National Association of Manufacturers submitted to the House Financial Services Committee a seven-page letter calling the climate rule “costly and unworkable" and accusing the SEC of “attempting to limit efficient capital allocation by discouraging stock buybacks." The U.S. Chamber of Commerce sent members of the committee a list of 15 questions to ask Mr. Gensler, on topics ranging from the climate-disclosure rule to crypto.
“The barrage of rulemaking at the SEC is unprecedented and merits the close scrutiny of Congress," wrote Tom Quaadman, executive vice president of the chamber’s capital-markets division.
