SEC Nominee Gary Gensler Wins Key Senate Committee Vote

The Senate Banking, Housing, and Urban Affairs Committee affirmed the nomination today of Gary Gensler to lead the Securities and Exchange Commission by a 14-10 vote.

The Gensler nomination now moves to the full Senate, where confirmation is expected.

Gensler was chair of the Commodity Futures Trading Commission (CFTC) from 2009 to 2014, and led Biden’s transition planning for financial industry oversight. He picked up key support this week when the U.S. Chamber of Commerce endorsed his nomination.

Gensler's "experience will be critical to ensuring businesses, especially small and emerging growth companies, are able to access needed capital so that they can grow and help enable a robust economic recovery," Neil Bradley, the chamber's executive vice president and chief policy officer, wrote in a Monday letter to the Senate Banking Committee. "The Chamber has a history of working constructively with Mr. Gensler, including on issues where we may disagree, and expect he will be a balanced leader of the SEC and strong supporter of competitive capital markets."

At the CFTC, Gensler implemented dramatic new swaps trading rules mandated by Congress following the 2007-2009 financial crisis, developing a reputation as a hard-nosed operator willing to stand up to powerful Wall Street interests, Reuters noted.

Following the November election, Tom O. Gorman, partner at the Dorsey & Whitney law firm, told InsuranceNewsNet that Biden likely would shy away from an SEC chair with a hardline regulatory or prosecutorial background.

Financial firms have enjoyed the relatively light regulatory leanings of Jay Clayton, former SEC chairman appointed by President Donald Trump.

Prior to joining the SEC, Clayton was a partner at Sullivan & Cromwell, where he was co-head of the firm’s corporate practice. His four years at the helm were relatively quiet, with Reg BI being perhaps the agency's most significant accomplishment.

The SEC rule took effect June 30 and, so far, with little fanfare or disruption to the brokerage industry.

Reg BI requires the following factors be considered in developing a recommendation for a retail customer: the customer’s investment profile, potential risks and rewards, and costs. It also includes a new "customer relationship summary" disclosure between broker and customer.

One reason the rule has not caused much disruption is the SEC's commitment to a soft rollout. The agency said it is merely looking for brokers and firms to make an initial "good faith effort" to comply.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.

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