House grills Gensler over shutdown, CAT and climate rule
SEC Chair Gary Gensler faced rounds of grilling and scolding at a House Financial Services Committee hearing Wednesday, with Republicans focused on the agency’s efforts on climate-related disclosures, crypto regulation, artificial intelligence, the Consolidated Audit Trail and overall pace of rulemaking.
The hearing occurred just ahead of a likely government shutdown, the effects of which accounted for much of Democrats’ lines of questioning.
This weekend, unless a federal budget fix or temporary agreement is reached, government agencies’ staff will largely be furloughed indefinitely, including those at the Securities and Exchange Commission. About 7% to 8% of SEC personnel, a “skeletal staff,” would remain active during a shutdown, Gensler told House committee members.
“The public won’t have somebody in full force overseeing the market,” he said. Examinations, enforcement and disclosure review would effectively stop. While the public could submit tips, complaints or comments, they would not be reviewed, Gensler said. And initial public offerings would be on hold, as no one would be around to review documents.
“If there were a market event … senior leadership would be there,” he said. “But again, we’d be down to a skeletal staff.”
The country has been through this 21 times since 1976. Prior shutdowns have hurt morale, Gensler noted.
“It’s hard on people. They’re not getting a paycheck,” he said. “They could get jobs at law firms and go elsewhere. They are dedicated public servants.”
Republicans peppered the SEC leader as they have in prior hearings, taking issue with what they said was a lack of response to records requests they made earlier this year. They also accused the SEC of recklessly moving forward on numerous
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