Regulation
SEC Chairman Jay Clayton Speaks on State of Securities and ETF Hurdles
CoinDesk Consensus : Invest
In what is one of the larger events of the year, multiple notable speakers have gathered for CoinDesk Consensus : Invest. This 2018 iteration features the likes of ICE’s, Jeffrey Sprecher, Bakkt’s, Kelly Loeffler, and SEC Chairman, Jay Clayton.
The purpose of the event is to not only address the current climate of the industry, but to bring clarity on past and future events.
SEC Jay Clayton
Jay Clayton took the stage today, and once again reiterated his personal stance on various topics. Of course, one of the burning questions was regarding pending ETF applications. On this matter, Clayton brought up two longstanding issues that must be addressed before an approval occurs.
Manipulation free markets
- On this matter Clayton stated, “The prices retail investors are seeing are the prices they should rely on, and free from manipulation – not free from volatility, but free from manipulation…how that issue gets addressed, I don’t have a particular path. But it needs to be addressed”
Custody Solutions
- While there are numerous solutions believed to be entering the markets in the coming months, there is not much in the way of custody solutions today. The most notable solution talked about, belongs to that of industry stalwart, Coinbase.
Fraud is pervasive. If one area of the industry is affected, then it bleeds over to adjacent sectors. One of the hottest topic of recent weeks has been the SEC and their actions taken towards ICOs. To date, the SEC stands firm that the majority of ICOs are securities. Those that do not market their tokens as such, are committing security fraud. While they have no issue with that being the case, they fully expect for token issuers to remain compliant with pre-existing regulations.
With this strong stance, it is increasingly obvious that services such as Securitize, Polymath, Harbor, and more are vital. It is this group of companies that have recognized the shifting mentality due to the actions of the SEC. They are the ones paving the way for a future of regulatory compliant digital securities being commonplace.
On matters discussed, Jay Clayton was clear to relay that these are his personal stances, and that they do not necessarily reflect his team as a whole.
Hester Peirce
While Clayton noted that his stances were his own, it brought to mind recent statements of Hester Peirce. Just days ago, Peirce once again raised hopes of an ETF as she stated an eventual ETF is ‘definitely possible’. The full podcast can be heard HERE. Beyond talk of an ETF, matters regarding the state of securities is discussed. It is a thorough, interesting discussion that is worth a listen.
This comes months after Hester Peirce publically issued her notice of dissent. This letter fueled ETF hopefuls, as it became clear that not all at the SEC believed they were handling the situation in the ideal manner.
Wishful thinking
At the end of the day, the recent sentiment that new services brought to market on behalf of Bakkt and NASDAQ making an ETF more likely, is wishful thinking. While these products are important, they do nothing for the hurdles that Clayton raised.
This cycle is going in circles. Jay Clayton essentially just reiterated a stance that he has expressed for a long time now. Two things are clear – the SEC is not backing down on manipulation and definition of securities, and the market is in desperate need of more solutions like Securitize.
