The heat has been getting to SEC Chair Gary Gensler — literally. Even as federal watchdogs and legal wonks race to understand the potential fallout from three sweeping Supreme Court rulings diminishing the power of regulators, Gensler told your MM host that what’s really keeping him up at night is a horror shared across the country in the middle of July: A busted air-conditioning unit at his house. Wall Street’s top regulator is seemingly otherwise unfazed. In an interview at the SEC’s headquarters in sweltering Washington, Gensler said the agency will pivot as the courts take up new readings of the law. It’s no surprise coming from Gensler, a one-time Goldman Sachs executive who equated the courts adjusting to the markets adjusting. But nothing about the agency’s goals will change, he said. What follows are highlights from the conversation, edited for length and clarity. (Pros can read the full Q&A here.) When you look at these recent decisions from the Supreme Court — Jarkesy, Loper Bright and Corner Post — how are you navigating this new legal terrain for agencies like the SEC, the CFTC and others? What we did in the ‘90s — what we do now — is, we do things within the laws that Congress passes but also how the courts interpret those laws. And when Congress changes a law or when a court changes an interpretation of existing law, we, as an executive branch agency, adjust. That’s part of our democracy. I’m a deep believer in this three-part separation of powers. Congress writes the laws, the courts interpret the law, we execute the laws. And so, if Congress changes a law or the court changes an interpretation of existing law, we adjust. Has it become harder to adjust as the courts have dialed up their scrutiny on agencies? It’s a privilege just to serve the American public and then take every day that you serve within the laws and how the courts interpret the laws to do the most good for the American public. Here at this agency, it’s about investors [and] protecting them, it’s about issuers who want to raise money and ensuring that the markets in the middle work for them and driving the fairness and efficiency of those markets. That’s the same. There’s been speculation about what things like the death of Chevron deference might mean for the SEC, but also broadly the government. As someone who’s already faced industry pressure in the courts, if you had a message for your colleagues across the government, how should they be navigating? I’m just focused on this agency and what we can do to help Americans investing in and accessing the U.S. capital markets. And every day, take that privilege to heart. We’ve, in the last three and a half years, finalized 40 policy projects. And while some of them have been challenged, 30-plus of them have not been, and they’ve really made our capital markets better. So my thought is just keep doing what we’re doing. Look out for investors, look out for issuers, follow the law and how the courts interpret the law. On crypto, CFTC Chairman Rostin Behnam recently talked about how the current approach to the market is “not sustainable” while calling for comprehensive legislation. You came out very forcefully against a House crypto bill that was passed earlier this year. I just want to say — I don’t think this is a time to undermine the laws that are on the books that Congress dutifully put in place to protect investors. And we have 90 years of history at this agency ensuring that the public gets the disclosure they need so they can make choices of buying and selling securities. And that currently, they’re not getting the required disclosure. There’s 15,000 to 20,000 token[s] … It belies logic to say none of these pass through the securities laws and to undermine that disclosure regime, I think, ultimately hurts investors and would undermine confidence in the broader markets as well. To allow conflicts where an exchange can also take custody and can trade against their customers and operate a hedge fund and co-mingle all that, I think it not only puts investors at risk but it also puts at risk the model that has grown up and supported our economy so well that we don’t commingle those functions. IT’S FRIDAY. Got SEC thoughts? Declan can be found at dharty@politico.com. And as always, you can find our usual MM host, Sam Sutton, at ssutton@politico.com and @samjsutton. Also, our Zach Warmbrodt will be in the cheesehead state next week at the Republican National Convention. Drop him a line at zwarmbrodt@politico.com if you want to meet up in Milwaukee. And catch his panel discussion on housing policy on Wednesday morning.
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