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ASA Sends Letter to Senate Banking on SEC Oversight Hearing

Calls on SEC to approve applications for cryptocurrency ETFs


WASHINGTON – The American Securities Association (ASA) today sent a letter to the Senate Banking Committee ahead of its U.S. Securities and Exchange Commission (SEC) oversight hearing. In the letter, ASA called on the SEC to provide greater regulatory clarity of cryptocurrencies, prioritize investor protections surrounding the “gamification” of trading and opaque Chinese companies, and urged the Commission to implement a capital formation and equity market structure reform agenda.

“ASA thanks Chairman Gensler for his leadership to prioritize investor protection and for his courageous action to hold China and Wall Street accountable,” said ASA CEO Chris Iacovella. “We look forward to working with Chairman Gensler and members of Congress to advance reforms that further strengthen America’s capital markets, protect investors, and create greater opportunity for working families across the country.”

In its letter to the Senate Banking Committee, ASA urged the SEC to consider the following issues:

Cryptocurrency Regulatory Clarity Through Approved ETF Products

“We believe the SEC must take bold and comprehensive action to establish rules of the road and protect investors. This includes approving applications for exchange-traded funds that hold physical cryptocurrencies.”

Addressing the “Gamification” of Trading and Risks to Investors

“The ASA was pleased by Chairman Gensler’s recent request for information surrounding the gamification trading and new digital trading apps whose business model is based upon facilitating heavy trading by retail investors. The SEC is right to consider whether these mobile apps are actually soliciting investors to enter into certain trades and should therefore be subject to Reg BI and other SEC rules.”

Reforming Equity Market Structure

“The ASA believes the SEC has put off meaningful equity market structure reforms for far too long. This includes a full examination of payment for order flow (PFOF), including both exchange PFOF and wholesale PFOF.”

Congress Should Implement a Capital Formation Agenda if the SEC Fails To Do So on Its Own

ASA previously submitted recommendations to the Banking Committee including, “ (1) Improving research coverage for pre-IPO companies and EGCs; (2) Scaling disclosure and other regulatory requirements for EGCs and small issuers to reduce burdens upon public company shareholders; (3) Proving greater transparency around the practice of short selling and cracking down on illegal behavior; and (4) Avoiding regulatory loopholes that expose investors to unnecessary risks, such as exempting certain merger and acquisition (M&A) brokers or private placement finders from SEC regulations.”

Regulation Best Interest Is Working

“We strongly suggest that the SEC refrain from making any changes to Reg BI’s national standard through enforcement, examination, or interpretations. Reg BI is transparent, it has benefited investors, and it works, which is why we see no need to tinker with it.”

Remove Opaque Chinese Companies from U.S. Exchanges

“The ASA was a strong supporter of the bipartisan Holding Foreign Companies Accountable Act, and we hope that the House will ultimately pass Sen. Kennedy’s Accelerating Holding Foreign Companies Accountable Act to ensure that Chinese companies that do not follow U.S. law are delisted as swiftly as possible. In the meantime, the SEC should exercise its authority to question whether companies listed on American stock exchanges and not in compliance with U.S. laws should continue to be made available for trading to the American investing public.”



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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.