Something Apes Missed - Read This

Hello fellow Apes!

I am making this post as it appears no Apes caught this recent lengthy piece from SEC Commissioner Hester M. Peirce. This is a very lengthy piece, and I cannot fully navigate all of it myself, but I did see a bit that stuck out to me in particular. Here is the link for the full read if you'd like to give it a go, and the piece I'm putting beneath this is from the very end of the page. None of this is financial, or legal advice, I'm just an ape that found the crayon and was able to read (barely). If any smooth-brains, or wrinkle-brains have any other input please provide it!

I suspect that many of you are wondering what other changes you have to look forward to under the new leadership at the SEC and other agencies*. I share that interest and look forward to hearing Chairman Gensler set out his priorities for the coming months. Market events, of course, will dictate some of the agenda.* The staff is working on a report about the events related to meme stock trading earlier this year, and some regulatory initiatives may come out of that work*. Similarly, as we understand more about the* failure of Archegos Capital Management, discussion about regulatory changes might be appropriate*. As usual, commentators have gotten a head start and have identified a number of regulatory responses, including possible regulation of family offices and* enhanced disclosure requirements for synthetic stock positions created through the use of total return swaps and possibly other derivative instruments*. Determining which proposed regulatory response will develop momentum is hard, and resisting that momentum once it has started is even more difficult. Let us not assume, as regulators so often do, that there is a problem and that since something needs to be done, any “something” will do.* Let us instead carry out the necessary analyses to determine whether there is a problem that market participants cannot resolve on their own*.*

Preventing family offices from losing their fortunes is not in the category of problems that the SEC needs to step in to solve. I am much more interested in expanding access to our capital markets so that less well-heeled families can build their fortunes. Similarly, the mere fact that trading desks at some financial institutions lost a lot of money should not cause us a great deal of concern as long as their activity was consistent with our rules. The very nature of trading in the financial markets means that trading desks occasionally will lose money.

Financial regulators do have a legitimate interest in risk management at regulated entities, and it may be worth exploring whether there were problems in this area that need to be addressed. But even here, such events inevitably serve as lessons for risk managers (underscored by the demotions and firings that followed the Archegos failure), but they need not serve as justifications for more regulation*.* The counterparties of market participants like Archegos have the strongest incentive to get their risk management processes correct and to determine whether those processes have weaknesses that need to be addressed. I encourage you all to take this responsibility seriously, to identify weaknesses, and to work to remedy them.

Thank you for the chance to join you today. I would be happy to take your questions now. More importantly, looking forward to a road that is likely to be rich with regulatory change, I extend an offer to you to talk to me about how we can make that road smoother. The goal is to achieve the intended objectives without unnecessarily inhibiting the ability of our markets to achieve their objective of serving people. Working together appropriately to adapt the regulatory framework to market developments, I am sure that we can keep the werewolves at bay.

Interpret this however you decide, $25,000,000 (25 million) is my mother fucking floor. 💎🙌