So, ah, what is going on moon gang doing a little bit of a specialty stream? Because our boy, the chairman of the securities and exchange commission aka gary gensler of team sec, is about to have a big old speech? And this ain't one of his normal big old speeches, this big old speech is a little extra big and a little bit extra. I guess interesting because the word on the street is they're. Gon na drop some interesting new ideas, let's put it for rules and regulations that will impact the markets as we know it. If you have been reading up on twitter and read it there's a good chance that rules that we've been running the nms since 2007-ish, circa 2007 might be tilted upside down and a lot of this - and this is all conjecture - we're about to find out really.

What's going on in a bit, could all be about the world of really payment for order flow? Is that legal? Should it be illegal? What's going on there we're all going to be listening to that? What's going on with these open auctions, there's just basically the a lot of the things that retail has been pointing out ever since the craziness of gme in january of 2021, the things that we've been starting to learn a little bit more about market structure. Market functionality is most likely going to be discussed, starting just about now. I have this up and if you guys want, we could switch it over to this right here. So what i have on the screen? Amc gme.

They just had a really good push into the lunch time uh and then i have up robin hood, because this is one that will most likely take a sizeable dip if they ban payment for order flow. Oh, but we actually do have this live for you. It's right up to our lunch uh. So let me introduce you here.

We go speaker. It's uh sec, chair gary gensler. Thank you for participating uh with us. Uh, chair, gensler was appointed in february and sworn in as the the chair chair of the sec commission.

On april 14th of 2021 april 17th of 2021, so uh chair gensler, you know, is knowledgeable of market structure, whether it be the fixed income, whether it be crypto or whether it be equities and he's participated in our conference a number of years prior when he was A cftc commissioner, so uh chair, gensler, thank you again for participating and i will turn it over to you for your prepared remarks. Rich. Thank you. So much it's great to see you again, i'm only sorry we're not in person.

I know we used to do this during the obama years together and uh with uh covet it's more remote but uh. Let me just say, as customer i'd like to note, my views are my own and i'm not speaking on behalf of my fellow commissioners or the sec staff rich last year, when i spoke at your conference, you and i spoke about how technology was transforming and will Continue to transform our equity markets, and this has led to some good things. Of course, i mean, for example, retail investors have greater access to markets than any time in the past and many other things in our equity markets. But the technological transformation also has led to challenges and i would know, challenges around market segmentation challenges around market concentration and yes, potential inefficiencies in the marketplace.

So right now you see there is not a level playing field amongst the different parts of the markets, the wholesalers, the dark pools, the lit exchanges, what what might call market centers and so further the markets have become increasingly hidden from view just quoting a financial times. Article earlier this week in 2009, off exchange trading accounted for one quarter: 25 percent of u.s equity volume last year during the meme stock events that share swelled to a peak of 47, so from one quarter to nearly half. What's more thinking about retail, the retail public, and particularly retail, marketable orders, 90 plus percent of retail marketable orders are routed to a small, concentrated group of wholesalers that pay for the retail market order flow and institutions around the globe aren't competing. It's that small group of wholesalers, so it's not clear with such market segmentation and concentration and yes with an uneven playing field, that our current national market system is as fair and as competitive as possible for investors and in a recent report.

Last year, the sec uh walked through that meme stock events of january of 2021 and the staff described four areas to consider of interest in promoting our three-part mission. You know investors on the one side, issuers in the other and then fair, orderly and efficient markets in the middle to date, the commission has released two proposals regarding two of those i'm not going to discuss those today. Shortening the settlement cycle, the plumbing and also enhancing short sale disclosures. A third thing in that report from last year was about digital engagement practices, which some people might call gamification.

We put a request for comment out on that in the fall today. I'd like to focus on the fourth aspect that was in that report, and that was about trading in dark polls and through wholesalers. We have not updated key aspects of our national market system rules, particularly related to order handling and execution since 2005, 17 years, a lifetime in equity markets and even rich for you, a lifetime in piper sandler uh conferences. I think then it was sandler or neil conferences, but maybe it was a firm even before that for you.

So last year i asked staff to take a holistic cross-market view of how we could update our rules to drive greater efficiency in our equity markets. Helps investors helps issuers if the middle of the markets are more efficient that which you cover each year. In these conferences, i'd like today to discuss work across six areas, minimum pricing, increment national best bid and offer disclosure of order, execution, quality, best execution order by order competition and payment for order flow and related exchange, rebates and access fees. So let me try to do it quickly, because i know rich you're going to have a bunch of questions minimum pricing increments.

Today we lack a level playing field amongst the different trading venues. Wholesalers dark pools, lit exchanges. There are many disparities between these three, but particularly, let me mention something about tick size in the lit markets. Investors see prices in one penny, increments, we're familiar with it rich.

You and i grew up when it was wider. Wholesalers, though, can fill orders at sub penny prices and without open competition. It's not level and more than half of the share volume in the first five months of this year was in stocks constrained by tick size. I'm talking about one on these exchanges and, in contrast, sub penny trading, including a tenth of a penny, so one tenth of a penny accounts for 37 percent of the share volume executed off exchange.

Given this activity, i really wonder why this lit exchanges should have that one penny constraint when the off exchange does not. It raises real questions about whether this structure is fair and best promotes competition. Why not allow all venues to have an equal opportunity to execute its sub-penny increments? Therefore, ibs staff to make recommendations for the commission's consideration around leveling the playing field with respect to two facets of tick size: first, possibly harmonizing the tick size across different market centers such that all trading occurs in the minimum increment regardless of market center. Second, given the sheer volume of off exchange, sub-penny trading, as well as the currently allowed on exchanges, retail liquidity programs go down to a tenth of a penny in these rlps, possibly shrinking the minimum tick size to better align with that which is happening off exchange.

So that's first tick size leveling, the field national best bid best offer the nbbo as it's called, is a quote designed to aggregate information across the different exchanges. It provides investors, important pre-trade transparency and then those shares are subject to what's known as the order protection rule. I've asked staff to consider three issues related to the so-called nbbo, and the question is really what's including: what's excluded from the mbbo? Is it a good measuring rod? Is it not a good measuring rod so first, the mbbo currently includes only what's called round lots, as you know, quotes of 100 shares or more has for decades. That seems to leave out critical gaps.

Staff calculations using trade and quote data found that odd lots. You know less than 100 increased from about 15 percent of trades in 2014 to more than 55 of the trades in march of 2022.. This has a lot to do with the transformational times we live in in technology and, what's going on, it also has to do with some average share prices. Moving up retail investors, the very investors who are more likely to buy and sell at odd lot prices are unable to see the prices sophisticated folks can see the prices of the odd lots more readily, but not the retail public and in 2020 the commission adopted something Called the marketing infrastructure role, which was recently upheld in court, i might note - and this rule created a new round lot definition which, depending upon share price, the round lock, could be between 100 shares and one share had increments.

It also added odd lot information to what was called the core market data, so under the transition schedule under that infrastructure rule, though, the implementation of the new round lot could take several years, maybe even many years, and therefore i've asked staff to consider whether we go Out notice and comment rulemaking again and accelerate the implementation of this new round lot. Definition. The infrastructure rule also included quotation information about the remaining odd lots, even those odd lots less than the 40 or 20 or 10 of the new definition around line so ibsdf. Whether we should consider also accelerating that information about odd lots into core data together, i think accelerating both of these timelines would allow retail investors to better understand prices sooner, but there's a third thing i want to say on this.

Is i've also asked steph to consider whether there should be an odd lot best bid and offer so that investors would know the best price available in the market, regardless of share quantity? Third, disclosure about order execution quality - you might be familiar with a rule - that's been in place for about 20 years that allows retail investors to understand and compare execution quality across these market centers. But today, retail investors cannot compare execution quality across brokers, yes for market centers, but not their brokers, and that's because this so-called rule 605 only covers market centers like the dark polls, the wholesalers and the exchanges. Moreover, the rule is 20 years old, so i've asked staff to make recommendations on how the commission can consider uh. We might update this 22 years is a long time in these markets and that investors could receive more useful information that could include mandated the broker dealers, along with the market centers file, some monthly reports on 605 and further that there be some consideration given to requiring All reporters market, centers and broker dealers provide summary statistics of execution quality, such as price improvement as a percentage of the spread.

Fourth, let me talk about best execution. You might be familiar with it right now. The financial industry regulatory authority finra the msrb, the municipal rulemaking board - have rules on best execution, but we at the sec actually do not these fin run. Msrb rules require that broker-dealers exercise reasonable diligence to execute custom orders in the best market so that their customers, not them, but their customers receive the most favorable prices under those prevailing conditions.

I think investors might benefit if the sec also considered proposing a role about best execution and, in addition, broker. Dealers and investors might benefit from more detail around the procedural standards, see finra msrb 22 years later. There's been a lot of questions, so why not provide better details on procedural standards? Brokers must meet when handling and executing customer orders. So i've asked staff to consider that as well and not just for equities but for other securities best execution, whether it's in corporate bonds or elsewhere, fifth got a little press.

I guess this week order by order competition. I want to talk about competition, promotes efficiency in markets. We know that, but it also sort of takes away, potentially some economic rents or excess profits above market competition that might otherwise accrue, and, yes rick. It might be some some of the people in the audience.

There's a there's a trade-off. Investors and issuers benefit if there's less economic rents in the middle and there's sort of the full benefits of competition, transparency in the middle. So, as i've messaged mentioned, the vast majority of retail, marketable orders are flowing to wholesalers plus 90 to a small handful of wholesalers that pay for order flow and, what's more, this segmentation means that institutional investors, such as pension funds and others don't get to interact directly With that order flow, this segmentation, which isolates retail market orders, may not benefit the retail public as much as orders being exposed to order by order competition, and some have suggested. I've heard it that the segmentation with the isolated segmentation allows retail investors to receive slightly better prices compared to the mbbo.

But as i mentioned, the mbbo is not a great measuring rod and, what's more, what's more is price improvement doesn't say that that's the price improvement that would be available with full order by order competition. So it's not necessarily the best price. It's just price improvement versus actually a measuring rod. That's got a lot of gaps in it and doesn't necessarily have the full benefit of order by order competition.

So i've previously discussed the mbbo, but in addition to that, i've asked staff to make recommendations for the commission's consideration around. How do we enhance order by order competition? Now this may be through open and transparent auctions or other means. It may be saying that investors get the midpoint or better, and then there might be this auction mechanism. If not, we know that the listed options exchanges have operated auctions for retail orders.

For many years, i've asked the staff in consideration of any recommendations for cash markets, stock auctions, to draw upon the lessons from the options markets and focusing on how do we assure full competition amongst all market participants, provide the best prices for retail investors last. Let me close on a topic: that's probably also gotten a fair amount bit of discussion payment for order flow and i think the related exchange rebates and, of course, there's access fees related to that payment for order flow can raise real issues around conflicts of interest exchange, Rebates can as well as described in the commission's settled enforcement action against robin hood in 2020. Payment for order flow can distort routing decisions. Certain principal trading firms seeking to attract robin hood's order flow told them that there was a trade-off between payment, voter flow and price improvement for customers, and i would note not all brokers, pay for order flow and many have said well what about zero commissions? There are zero commission brokers that are not paying for order flow, so zero commission doesn't mean zero cost to the retail public and it comes back to how much of the price improvement is being shared with the retail public versus staying with the wholesalers in the dark Markets so as a staff reporter in the gamestop report, payment, fordflow may incentivize broker-dealers to use digital engagement practices, another project of ours, gamification to increase customer trading.

The european unions actually actively considering banning payment for flow joining other regulators from the united kingdom, canada and australia exchange rebates, as i said, also present conflicts because exchanges give rebates to traders and, in particular, high volume, traders benefit more from these arrangements than lower volume, traders And we often talk about high volume price discounts, but here we're getting a lot of orders routed through the biggest market players that small brokers are routing through large brokers. Trying to get some of that discount and the large brokers are getting to see that flow and getting discounts and the like leading to greater concentration. I would note, as well so just like payment for order flow, presents a conflict routing of marketable retail orders. Exchange rebates may also present conflicts, so thus ibs staff to make recommendations around how we can mitigate the conflicts with respect to both payment order, flow and rebates, and one thing i've asked them to consider is whether exchange fees would somebody pays it to access the quotations On the exchange and rebates should be more transparent, just making them even more transparent, so investors can understand these amount at the time of the trade execution.

Finally, i've asked staff to consider how the access fees might change in light of the potential lowering of minimum tick size, minimum increment, a penny, access fees right now, 30 mils or three tenths of a penny that proportionality uh. What what? What should happen with that? If we reduce the minimum pricing increment, it may also be appropriate to reduce these access fees. Of course, that would relate to these rebates as well. So, let me just say, rich an audience.

In conclusion, i think we at the sec need to look for opportunities to freshen up our rules to ensure that america remains the gold standard of the world's capitalist markets. Nothing stands still technology's rapidly changing, and so we can't take our leadership in capital markets for granted and we really fundamentally haven't updated our rules since 2005, other than the infrastructure role and data that i mentioned earlier and as they continue to change the face of of Markets, technology, business models and like we have to look out for the investors on the one side and the issues are on the other, and particularly retail investors uh, as there is more retail investors in the market than ever before. It's not clear, given the current market segmentation concentration, lack of level playing field that our current national market system is as fair and as competitive as possible for investors. I think we can do better here for retail investors.

I thank you and rich. I turn it over to you first uh, chair gensler, thank you for addressing my audience here. What you just outlined is certainly impactful to a number of the wholesale brokers, exchanges and e-brokers that are present, and i also just want to commend you for your commitment to keeping rules uh up to pace with the technology which we know, there's been a lag so With that i'll get into a few questions here, if you don't mind absolutely first uh you've outlined sweeping changes which you you know we just heard and uh in equity market structure you've emphasized this order by order uh competition. So could you give us a better view of what that order by order competition might look like and then also uh? What wasn't expressly clear to me is: is payment for flow prohibited or would payment for the flow still be able to exist in this order by order competitive environment? Look i'll, say this rich? I don't want to get ahead of my fellow commissioners or the staff.

I thought it would be helpful uh, seeing that you invited me to this speech to to sort of put out there what we're, considering so, the on the order by order competition, it's really uh what the staff, what i've asked this have to focus on is for Retail marketable orders: how can we inject greater competition? So the segmentation is not isolated segmentation right now, two three wholesalers are buying that payment buying that order flow not competing order by order. Yes, there's some price improvement, but not as much as you can see in these 605 reports and other reports in terms of uh, the the the you know: the realized prices in the market and so injecting greater competition through an auction mechanism. Learning, of course, from the options, what works, what doesn't work in the options, markets and and other groups of staff are actually thinking about, possibly what to do there uh, but i don't want to get ahead of that in terms of payment for order flow and rebates. As i say, they present inherent conflicts to the market, three other jurisdictions and a fourth a big one.

Europe is considering getting rid of them, so i continue to ask staff what should we do there um, but, as we put this audit together, we're going to put it out to notice and comment and obviously hear from the public as well understood. Thank you, chair gensler. The the next is many and you uh sort of alluded to this many regard the u.s retail markets as highly efficient and even the most efficient in the world uh. What some would say.

So i guess the question is: is there any data uh to suggest that these the auction process will be better, resulted in economic benefit, or do you plan on doing any pilot tests uh and just one last part to the question is: are you concerned that it Could have an impact on the low pricing and nil pricing that the e-broker's name? I just let me just say this. I think it's a it's. It's it's uh, misleading, there's a cost to retail, to this current system, and the cost is that two or three highly concentrated market makers are buying your order flow and though there might be some price improvement against a false measure, a poorly put together measuring rod, nbbo That doesn't mean it's the full price improvement and it doesn't mean that it's best execution. So i think, if we put in our rule, set our rule set not just finra's our rule set and put some procedures around best execution.

We consider put out to public notice real auctions, so it's still segmented retail flow but rich. Think about everybody on the other side, institutions that currently cannot uh access that that retail flow is that the best capital markets uh, and so that's what we're going to put out and yes, we'll put it out with economic analysis. Yes, we'll look forward to the public weighing in with their economic analysis and we'll have the lively debate understood, understood, uh a little bit on the same same sort of questioning line would be you know what is the timeline? We've heard the broad outline by you uh, but i suspect you know you'd have to go to proposal comments. So what is the real timeline behind what you're suggesting and then would you be open to a round table to discuss? You know this is pretty some highly controversial topics.

Would you be open to a roundtable discussion which the sec has held in the past and which rich? Let me just do this: there's lots of ways to get public input, we're doing it all along anybody. Who's! Listening to this and and and uh watching this, let us know what you think: this is not a proposal. This is a chair speech, i'm not speaking on behalf of the staff or the fellow commissioners. I've said that up front.

I really mean it but weigh in talk to us when we put a proposal out um. We have multiple ways to uh engage with the public. I feel that that, as a chair of this, i just it's a remarkable privilege to be chair, but i give uh speeches i sort of lay out something. I try to say what we mean and mean what we say.

We had a gamestop report last year and we got a lot of comments in on that uh, informally and formally and so forth, so continue to engage with the remarkable staff at trading and markets and division of economic risk analysis and, of course, engage with individual commissioners. As well and their offices, and if we get to a spot where we propose something, i can't pre-judge that. But if we get to the stop, we propose something we'll we'll hear more and whether it's round tables or or meetings uh, there's there's it's really important to get the public's input. Thank you.

Chad denzel one last question on equities and if you don't mind, i i have a question or two on crypto as well as fixed income markets as well, because oh gosh, i figured as much rich. It's in my allocated time, though sure so uh first question. Just last question: on equities, you mentioned the sip infrastructure proposal, uh that that was upheld by the courts, the uh dc courts, and that you would pick you'd pick. One, i think, was the odd lot uh about publication of odd lots.

Uh. So are there? What do you expect to implement the sip infrastructure proposal in broader the broader outlines over it over your over the next year or so right? Rich? I don't remember the exact uh dates that are in in that rule, but it's now been upheld. Of course, the litigants will have to decide what they do, but but there's a various serious uh uh. That was a unanimous vote by the way at the the commission and two years ago and and uh it was to um it's basically similar to what i'm saying here: it's how do how to use the benefits of competition to drive greater efficiency in our capital markets? That was competition, a bit around market data and driving some efficiency in that infrastructure role, but you're right, i did mention two aspects: the the definition of round lot and the inclusion of odd lot data and core data that i've asked staff.

Should we go out to again, it would be notice and comment rule making, but notice a comment to accelerate those two aspects earlier uh, along with the other potential reforms. I'm talking about here. Great, thank you on the equity. Now, if i could follow up on crypto, these are general questions chair, so uh.

Just recently, a bill, i believe, has been floated by uh senator loomis of wyoming's senator senator lummus llamas. Excuse me uh angela brand of new york, uh sort of brought out lines of regulation for crypto, and i guess the question is you know first, what's your broad impression? Second, just you know if you can't answer that which is doubtful but uh. What's your overall view on the need for regulation in crypto uh and then how well the bill from what we understand: divvy's up responsibilities of regulation uh to both the cftc and sec? How well do you think he can work together to actually execute on regulation? So there's a lot you packed in there and uh. I've had good dialogues with senator lummus and and i've known senator gillibrand for years and certainly worked with her very closely in the obama years.

But i whatever comments i might have i'm going to share with them. Not with you and your audience now and we, i really haven't reviewed their bill. It was released yesterday, um just but let me go. Let me go to a broader sense: crypto, this speculative asset class one and a quarter trillion roughly dollars right now does not have the investor protection that the public needs and i would contend if this field has any future what the field needs as well and there's Three sets of big public policy issues, it's investor protection which the commodity, futures trading commission and the securities and exchange commission is kind of.

You know our domain i'll come back to that question. There's the issues of financial stability and money creation around stable coins and the like that, the banking regulators treasury. We have some role in that as well, because many stable coins look like money market funds, many algorithmic, stable coins. You know really are uh under our howie test very similar to you, know securities or our investment contracts, what it's called and then thirdly, illicit activity and how we guard against the use of these coins to circumvent uh, the public policies, around sanctions and illicit activity and Ransomware and the like, so there's a lot going on here to unpack, but i would say most of the tokens.

Thousands of tokens have an entrepreneur in the middle or a group of entrepreneurs in the middle raising money from the public and the public's, anticipating profits based on that, that's the core of a definition of an issuer-based securities regime. That's what the sec was asked to do in the 30s painted with a broad brush, thurgood marshall's words, not mine, to protect the pub against sham and fraud. I had the honor to chair this cftc. Another great agency focus on derivatives and particularly derivatives around commodities and so forth.

Ours is an issue or regime protecting the public when a group of entrepreneurs should disclose something to the public and you're a research analyst rich. You know how important that disclosure is and to get that disclosure make sure somebody's. Not you know lying to you defrauding you not trading on insider information, that's what we do well at the sec, and so most of these tokens are actually right. Now, i'm not pre-judging any one of them, but right now their investment contracts, their securities and thus the trading platforms, the ones that you cover with great interest, some public, some private, some private that want to be public.

Those trading platforms should come in work with us. I've said this publicly we're willing to think through how to use our exemptive authorities and basically, we've got these projects registered, crypto markets registered crypto intermediaries and yes registered tokens. We are also looking very closely at the stable coins because, frankly, they look a lot like funds and how they're operating and guess what they're offering yields, and sometimes they call them rewards. Sometimes they call them yield.

That's that's a return on something um. So we've got all these projects but uh chair bedroom and i have talked uh off and on about how we do something enter into a memorandum of understanding, because some of the tokens are commodities. You know bitcoin being one of them. So there's a lot here to work with work with the bank regulators work with congress.

If, if appropriate, moving forward, i know i went on a little bit. That's fine chair if i had to echo anything from the management teams of the crypto companies that presented here today is j. They just want clarity from a regulatory. Well, it's good! I, if you want clarity, i say this and i can say your first names pretty well, but i won't uh because i'm always told not to, but i know most of you i've met with.

Most of you is work with us come in because otherwise it's just you've got securities floating on your platforms and you're right now, operating outside of the law and that's what we we have a robust examination and enforcement units. It's half of our staff at the sec between exams and enforcement, but work with this and and think this through and - and i will say this - also some of the traditional incumbent exchanges that are not yet there they're working with us. So the the the the crypto exchanges that are potentially operating outside the law it'd be better to work with this too, and i think you'd want to say that as a shareholder rich, i, i would probably agree chair so uh last sort of category of a last Question, i might have one follow-up, of course, but uh in regards to fixed income. In a recent speech you outlined, you know how big the fixed income markets were, how important they were.

You know in comparison to the equity markets and uh. You know you highlighted post-trade transparency, the platform reforms and resil resiliency i'll keep this at a high level. But what would you you know you outline reforms in each area. We won't get into detail here, but what's your overall goal in trying to regulate uh, i guess the fixed income markets so um i put in a nutshell: i've been blessed to serve now three presidents and it's a remarkable privilege.

I'd like to be able to look back and say we made our capital markets even stronger, and i think of it in terms of efficiency, that in the middle, how we price and allocate capital and risk in our system, it might sound geeky. It might sound a little bit finance oriented, but unless we do rich, other countries will surpass us. It is part of our great success as a nation. We have a rule of law, we've got an innovative population, we've got a really so many great attributes, but one of the great attributes is this: this system of what i'll call uh, uh, transparent, regulated markets, and i think it's part of our geopolitical uh success, but I wouldn't take evil field, as we see in the equity markets or over in the treasury markets that we see so many times.

Our central bank has to come in and basically hold kind of what i'll call the the the left tail risk the risk that the market has jitters and we had it in 2020, we had it in 2019. We had it in 2014.. If you watch your history, you can find three or four events in the early 80s. You can find event after event.

Can we can we make that market the treasury market more resilient and then in the broader, fixed income, more transparent? And so yes, we've been working with finra and trying to uh revise the trace reports, not only to be shorter and more timely, but also inject more relevant detail in the corporate bond market and yes working with their colleagues at the treasury in the federal reserve about Post-Trade transparency in the treasury market, but the single thing that sort of animates me is is uh in this honor to be in this role is: how do we sort of in a rapidly changing technological world and a lot of global competition? How do we ensure that our capital markets in the middle uh has fewer economic rents, greater competition and transparency and efficiency that the buy side can compete with the sell side in those fixed income markets and really compete? We get the principal trading firms the high frequency trading firm, so to speak, registered so that they, but but once they're registered then there's more of a way they can compete in the middle, even with the the prime uh, the what's usually called the primary dealers. I went on a little bit, but it's all about trying to drive greater efficiency in a geopolitical competitive world. Thank you uh one last follow-up on the equity markets, because someone has brought this question to me: would the auctions in cover or preclude uh, say large banks that have internalization but of orders uh that internalize a customer order with their own trading desk? Would that would they be included in this auction again, i'm not trying to pre-judge the staff and where we might come out and everything, but i thank whomever asked the question for the question and we'll cons. You know look i i don't uh want to prejudge that.

Um i want to thank you again and all your audience. I want to thank you, because i know that you know you didn't start in a career in finance. You started at west point if i remember and uh um, but we both went to wharton you're you're. Very analytic, we're analytic we're going to look at the economics and the reason i'm closing this way is it we we benefit if the members of a conference like this give us feedback, give us input, we, if we actually put something out of the equity markets, give Us feedback but of course, we've already put out a lot of things on the fixed income markets.

We've put out things on shortening the settlement cycle. Give us feedback economic ground truths, really help know that we have a little bit different role: we're representing 330 million americans you're representing your your clients, your customers, your shareholders, frankly, your revenues, so we you know we might have a little bit different perspective, but we really Do benefit from the hard analytics that a guy like rich repetto is so good at, but uh and the economics matter gia genzler. I want to thank you for your commitment to transparency. Thank you for your commitment to keep investors.

You know there could be plenty of debate, but keep people informed uh. What i would say chair gensler. If i respectfully call you gary call me gary. Of course, you have for years, you've been a force uh as a regulator, no matter what job you had so you've truly been a force, and i respect that and i think there'll be debate, but we respect you know your effort and the time you put in To try to get the things done, uh to get.

You know to execute on your job as the sec commission. I don't know you you're you're you're. Thank you for the compliment. It was probably sam and jane gensler's work, and you know you might know i'm one of five.

Kids and i've got an identical twin brother, and you know you had to had to be fast around against her dinner table and a former mit professor of crypto as well so yeah anyway. Thank you, chair gensler. We appreciate the update and hopefully we'll talk to you soon. I won't ask the question: will you come back next year? We just hope to talk to you again rich.

I know what it is. You always want me back if i'm still in the job, but like six years from now, will you be asking me back? You know, that's not true. I did ask you when you're at mit as well, so i i believe that when you're a professor thank you chair gensler, we appreciate your thank you. All righty are ready all ready already alrighty alrighty alrighty all ready couple things so throughout that i was looking at the nasdaq amc and jimmy had a good run, and now they were selling off into that and now they're popping just for a little bit of intraday Stuff robinhood was selling off hard and then when we were - and i want to talk about payment for order flow uh, but now once again, selling off okay couple things.

So obviously that just happened in real time. So i want to give you two interesting things. I noticed, but give me a little bit more time after this to digest and really go through it again and i'm sure there's a lot of fancy. Fancy people out there who are going to know far more about this that are going to have interesting, write-ups tonight and breakdowns.

I just want to give you my knee-jerk reaction very very quickly and in fact let me switch over to this, since you see what's going on, basically with amc, gme and robinhood, okay, so two things uh number one and i know a lot of you guys want To hear about payment for order flow, and i'm sure you have a lot of opinions on really gary gensler lip service is the sec doing all that. So let me quickly do it in reverse order? Let me quickly touch on crypto. Do i like this? Like my opinions aside, it sounds like the sec is gon na like really come down hard on crypto and crypto exchanges, but what i thought was noteworthy. Is he particularly called bitcoin a commodity, the rest of them, saying, hey, they're, probably not going to pass the howie test, these exchanges, who are dealing with them, they're, probably trading securities on their books, come to us talk to us and the only one that it seemed Like he gave like a little bit of a lifeline to was particularly calling btc bitcoin a commodity just wanted to point that out to all of you next thing payment for order flow.

I thought this was interesting. I'm reading chat throughout and i could understand anger, frustration and i don't think you're wrong there, but what i want to point out that might be a little bit more of a silver lining than you guys. Maybe you didn't pick up at on the first time through, so i'm just trying to hey, maybe a little bit of positivity here throughout that entire speech, when he was listing his six things, he was very specific. You could tell he was thinking like he would get to a sentence and he was picking his words very very closely because basically there's millions and billions and trillions of dollars in flux of our market system and how's it going to work.

So that's why he was picking his words, so so so specifically when we got to number five and six. That's when he was talking about the order by order auction and the number six itself was about payment for order flow when he got to the gist of number. Six, like the sixth big thing that the sec is looking into. It related not to the banning of payment of orderful.

I'm telling you go, listen back it related to the transparency surrounding payment for order flow, so that was number six and right away. I saw you guys you were noticing and you're like whoa whoa whoa like what about banning it. But what was interesting is when we got to the questions of the guy, who apparently worked at west point or knew him at west point and wharton and yada yada. I wrote this all down what i thought was so crazy was he? The questioner wanted to be a little bit more specific and he basically said: are you talking about banning it because when he stated it, he said and like this was weird because it was roundabout.

He asked him like a lot of questions which i don't think he should have done. I think he should have asked some specific questions, so it was a roundabout question and then a roundabout answer. So if you get the first part of the question, the last part of the answer gary came back in and instead of saying no, no, no, we just want more transparency. He could have done that, which i think is interesting, because the whole time he was super specific as with his words, but when he kind of came back to answering that question about banning it, he said: listen in three major jurisdictions, it's already banned and then the European union, it's being voted on and considered right now to ban it there, which i think it shows how harsh he was against and he's like listen.

This is a conflict of interest. He wasn't sitting there saying hang on, we got ta look into it. We want more details, it might be a conflict of interest. He pointed out.

Yes, it's a conflict of interest. Yes, it's banned in three places and european union who were probably cause later on in the speech he was talking about how we want to be uh, still geopolitically, the strongest market. He was saying they're looking at banning it, so i think it's unique and i just want to bring it up to you and hey. Is it lip service? Maybe maybe not.

I just want to point out how he was so careful with his words, but when it came into that it was kind of harsh against payment for order flow and then the final thing i want to talk about. We talked about crypto. We talked about pavement forward overflow and the final thing i just want to talk about the general thing of being a retail trader investor. This is really really tough for anyone to come up with because we're not in those meetings.

I can understand - and i empathize and sympathize with everyone's frustration. Gary gensler is the head of the sec and a lot of traders and investors who identify like retail traders and investors who especially who identify as apes. They feel as if we've been let down, and i would say for good reason like let's just use something as simple as taking away the biplane. That seems crazy.

Aren't we supposed to be protected by the sec, so obviously it comes back to heavy lies. The crown of hey, we feel like we were wrong by the market who supported to protect us with the market. Gary genzler, i see how we got to that conclusion, but where my mind has been at lately, is it's one of these things of we're being told the right thing over and over again, if you listen to that, it's like okay, it sounds like they're trying to Fix some of the things that we're pointing out - and that seems good, but then there's that other part of like okay. Well, if you're always saying the right thing, if you're always talking the talk, where is walking the walk and that's the thing where i personally become confused? Is it one of these things that they're just talking the talk, giving us lip service and they have no plans to actually execute it, or is it one of those things that i don't know how political this world is like? Is it one of these things that day in and day out, it's basically the wwe in like the political arena and them fighting and they're attempting to do the right thing and then they're being stymied by someone that we don't know because we know really money runs Politics or the right lobbyists and the right people being paid for who are stopping this, and this is one of those things that unless you're in that inner circle, i'm not really sure how it goes.

So for me - and i get this question a lot like - is gary genzler truly fighting for us - i don't know, and unless you're him or in that inner circle, i don't know how any of us would know. I understand how it's easy to target him, because that he's in that position and we want proper protections. So i get it it's easy to rile against him and rally against him. I should better say, but what i think is like we don't know if he is or he isn't and i think it could go either way.

Maybe he doesn't have our back or maybe he is trying to fight for us and because of the like, really basically to be blunt, the up political arena that we're currently in maybe he's getting stopped somewhere else. And it's one of those things that like unless we could talk to him directly and even if you can talk to him directly, he's always forced to say the right things at the right times. I don't know how we get that answer. I don't know how we get that answer until one of two things happens, his tenure ends and there's no progress or his tenure ends, and he fixes the things that he's telling us that he wants to fix.

We just it's one of those things. You have to wait and see how it plays out. Unfortunately, but overall i want to summarize this with. These are my knee-jerk reactions.

We just all watched it live together. Give me a little bit more time to digest it, i'm going to watch it back and beyond that, there's going to be people who know far more about this type of stuff who are going to have the response, videos and the write-ups. So i highly encourage all of you to dive into it and if i see anything interesting, maybe i'll do a covering video or maybe i'll, just retweet it out there. But that's what i have for you with gary gensler's discussion about potentially updating some major major rules that have been in place in our market system since 2005..

I appreciate your time and i'll catch you in the next video you.