The committee will come to order. I want to thank the c ha the committee will come to order. I would like to thank chair glandular say it to come back from boats and thank you for making yourself available. We now will recognize the gentleman from new york for five minutes. Thank you mister chairman. Thank you so much for being here. I also share the Cybersecurity Infrastructure in the homeland committee. And congress places an Important Role in harmonization so there is no freedom of regulation. We had a hearing, including one from ppi, that their cybersecurity employee spent anywhere focusing on compliance matters instead of daytoday emission. Last month, the fcc decided to release for new proposals with regulatory language on resilience for the Capital Market industry. This comes nearly a year after the fcc proposed to the rules that would require issuers to publicly disclose it within four Business Days following the determination that let me be clear, given the existing workforce challenges that we are seeing across slimily the Financial Services sectors, but the rest of the critical, 16 Critical Infrastructure sectors, we must ensure that we are not thriving talent out of the Cybersecurity Workforce pipeline because the federal government is not analyzing how rules and regulations interact with each other. With all of this in mind, has the fcc worked with cisa or other agencies on the development of any of these proposals, or how can the fcc harmonize its many proposals with the existing regulations such as cybersecurity and Incident Reporting for Critical Infrastructure act . I thank you for that, sir. And yes, we have had good conversations with cisa, and the director, but also her staff with regard to the best standards that they think that they have in terms of cyber resiliency, and enhancing that for our Investment Advisers and dealers. That is great. But we need to do something consistent. Theres going to be a 72hour rule there, and a fourday rule currency that has another rule. 30 to 40 having employees, especially in the financial sector, of spending time to work with compliance. It leaves us vulnerable and i think we need to do a better job. Its not just you, but it is everyone, i think we need to continue to do that or do it better. There is a followup, yes or no, has the fcc conducted analysis on how the two proposed rules from last year finalized the recently proposed rules for this year . We actually reopened one of the rules from last year, so that which relates to Investment Advisers, we reopened to be simultaneous with these three new proposals because there might be some similar commenters. Thank you. I want to change templates. Now, another consistency between two proposals that you have pending at the fcc, the first is your proposal, and short scale disclosures which seems to me excludes individual position reporting to avoid negative consequences such as copy cating, and behavior. And the disclosure there is one on the monthly basis and then in contrast, your proposal on the securities explicitly requires individual position on point b, with a timeline of point a, and i just want to understand the distinction, has they related to frontrunning, copycating, and her behavior which risks the short sale disclosure do not exist in the case of securities based on this disclosure, and how did you come to that conclusion, and what Economic Analysis was performed . I would like to work with you and have staff get back to you because it is a detailed question. But each of these really want to address a separate information, in terms of short sale disclosure, that actually is a congressional mandate as well, and we worked through that, but with regard to security space swamps, it was an authority that was given to us separately. Hopefully we can get a more detailed answer because it just does not seem to make sense, i think what would be good for the goose is would be good for the gander here. So maybe we can get back to something more detailed. And i just want to spend the last bit of time, because i have 30 seconds left to discuss the rulemaking and regulated advisers. Chairman, it is clear that the fcc is rushing forward with this rulemaking without taking into consideration the full impact, one example is the significant proposal makings on regulating advisers. There are currently seven. And other proposals we discussed it appears the fcc is not providing analysis, economic or otherwise, or an impact. It is unclear if they understand the ramifications on pension plans, merging funds in new york, and across the country. Just last week, the new York City Pension Fund warned that some of them would harm public workers. I think theyre serious concern surrounding some of these proposals and i encouraged to read some of them. The chairman recognizes himself for five minutes. I want to follow up today on my march 30, 2023 letter to you regarding staff bulletin 121. And the fcc is fundamental changes to the way that banks and Financial Institutions are expected to account for the custody. S a b and casey institution acting as a stadium on Digital Assets, should hold custody Digital Assets on Balance Sheets. Im concerned the office underestimated the effects, and its requirement to put custody assets on the balance sheet, and they would effectively be precluded from serving of Digital Asset custodians. Chairman gensler, you have not responded to my letter. March 30, 2023, and i ask unanimous consent to submit my letter into the record without objection. I have a receipt in front of me and i know the fcc received it. Can you explain why you failed to answer my letter, mr. Chairman. There is a letter that i just thought in the last two weeks. It is dated march 30 2023 and i have or two and a half weeks ago. Sorry. Let me just address again the substance. I will reclaim my time. I expect a written response very soon and chairman again sir i am new to this committee and it may not look like it today but i sit way down on the dais. Ive heard rumors and you are not particularly interested in communicating with congress. The entities the regulator just about anyone else. As you can tell by how late i have been in the speaking order for this hearing i am nowhere near one of the most senior members of congress in this room, but let me remind you that everyone on this dais represents different parts of the United States of america and by ignoring or letters, you are effectively ignoring the American People and make no mistake, we will hold you accountable. Now that we have gotten that out of the way let me move on to my questions, as you know the chairman of Federal Reserves, jerome powell, said custody assets are off Balance Sheets and they have always been. Congressman barr ask you this morning about whether you conferred with the credential regulators before issuing it. You said that to quote, consulted with Bank Regulators subsequently, and quote. Can you clarify what that means . Does that mean that you issued it without consulting with any of the banking regulators beforehand . Again, that is that its a yes or no question. I will have to address your question. Putting Crypto Assets off balance is also a recipe for further risk in the system and disaster for the system and i will repeat my question, did you consult with federal credential regulators before issuing staff that is a yes or no question. Under the Authorities Congress gave us our chief accountant is the chief accountant looking at what Public Companies questions are and they consulted with internal and they put out the staff accounting. What feedback did you receive from the provincial regulators after issuing it. Did they identify any conflict between justice has happened in the past they have their own authorities that detail what regulatory actions they would take. But we address just Public Company accounting and today in the u. S. , there is no good regime. Once you take a crypto asset, a company, if you go into bankruptcy, there is no segregation and until that is resolved and protected, that is very different and taking custody of equities and taking custody of income publicly traded banks effectively would have to follow that . That is correct. You recognize what a huge difference that is from credential federal regulators with a familyowned bank . There is quite a difference. Do you think that is fair . If you want to raise money in the u. S. Public markets then you have to follow accounting standards that properly account for your liabilities and serve Crypto Assets. What about what mr. Powell said . He clearly said just the opposite from what you are arguing. I will stay in arlene under lane is that Congress Gave one Agency Oversight of Public Company accounting and that is securities and exchange commission. My time is expired. The gentleman from new york, mr. Lawler, is recognized for five minutes. Thank you mister chairman. How much money does the fcc spin to analyze the impact of Climate Change on Capital Markets . Sir, we have about a two plus billion dollar budget, and part of that is the economics unit of about 160 people. But this is just about the disclosure regime and it is not if i understand your question, about climate risk. We are not a climate risk regulator. We are a disclosure regulator on Capital Markets. Okay. How much money have you spent . Our oversight of the Capital Markets is two plus billion dollars a year. A. Is it to review the fcc should be Guiding Companies and investors and the type of investments they are making . As mandated by congress, investors get to decide which investments they take, but it is based on full, fair, truthful disclosures. So investors get to decide what you believe esg should be a component of that decisionmaking process . What we know today is that hundreds of companies are making disclosures with regard to climate risk and investors across the spectrum from small investors to large are currently using those climate risk disclosures in their investment decisions. But do you believe that that should be the guiding principle of how people invest . It is currently happening in the u. S. And around the globe. So we have a role to help bring consistency and comparability and disclosures that are already happening. Does the fcc deserve any culpability in the collapse of ftx . Number of entities in the crypto field are noncompliant with u. S. Law as adopted by congress over the years and we are going to be to help bring them respectfully, that is not what i asked. Do they just look, i think that when people are defrauding the public, we go after them and that is what we have done here. You are not answering my question. I am asking you a very simple straightforward one. Does the fcc deserve any culpability at all . I understand your question. I am very proud of the fcc and its staff and we will continue to pursue so you do not believe that the fcc deserves any culpability with respect to the collapse of ftx . We have a field. A whole field in crypto that understands the law. And if they are providing Exchange Services or broker dealer services, Clearing Services of crypto security tokens, they should reclaiming my time. Why didnt the fcc take action on the alleged secret landing of at least four billion researchers. Again, i am not able to talk about specific companies or investigations but i will say, all of these companies should come into compliance with the law and until they do we will continue to pursue and investigate and follow the facts and law. But it takes time to build cases, it takes time to do them thoughtfully and carefully as you would want us to do. I would just like you to answer my question. But thats fine. As you have proceeded with such drastic rulemaking at a rapid pace, the fccs office of Inspector General raise significant concerns with your shortcoming periods, limiting the amount of feedback that the staff receives. Why have you ignored the ig and pushed for a shortened comment periods . We actually have benefited greatly from comment periods when average we have we have rules outstanding for about 70 to 80 days for when we i would just remind you at a bloomberg conference who said you dont trust industry participants to provide honest feedback. So do you actually benefit from common periods or no . We very much benefit. You take back your comments where you say that you dont trust your feedback . The feedback that we got is helpful and it is part of the robust input. You do trust your feedback . Your quote was that you do not trust industry participants to provide on its feedback. Do you, or dont you . We rely on the feedback as part of our ongoing the gentlemans time is expired. Congratulations. The gentleman from iowa, is now recognized for five minutes. Thank you mister chair. Thank you chair for joining us today. In my state of iowa we have over 400 insurance companies, many of them very small but the invest over 66 billion in our local economy. What i was on the Financial Service roundtable in my hometown of des moines, we have everyone around the room really focusing on the severe impacts of your agencies, intentional or unintentional but i would like to get to the bottom of this, and a price proposal on main Street Retail investors. Earlier today you highlighted the fact that this plan would favor Small Businesses. But honestly, i dont know if they feel the same way. Im very concerned about Swing Pricing and hard close proposals that draw strong opposition from both industry consumer advocates with most recently the Consumer Federation and america arguing that it would basically create a two tier market here. It would benefit sophisticated investors at the expense of mainstream guys back in my hometown and the role would limit access to trading and pose additional cost on a hard working american 401k plans nurses with for 57 plants, teachers with your proposal acknowledges these middle class investors may lose their ability to manage that investment through the close of these dark mark it each day. Mister chair, my first question to you is do you believe the 401k should have access to current pricing of mutual funds that you are selling . I think that 401k as well as many other Retirement Plans benefit from this Investment Vehicle. In other words the pricing of security is a crucial factor that they should consider when making this investment decision, correct . If i understand your question, yes. Good. Why is the fcc effectively picking a winner model and loser model. We are trying to invest specific risk in our Capital Markets right now that in times how stressed the open and community a coming and calling upon the Federal Reserve for assistance. So it is really a matter of how wide is there, do you call it Public Safety net . And i know that my dad, when he was in trouble, he had a Small Business, he wouldnt have had the u. S. Government helped build him out. They are trying to lower this risk in bond funds. I want to give him the details here because mandating a hard close for mutual funds is not a new idea. In, fact it was proposed over 20 years ago back when i still have all around here and was working for then financial chairman, senator Chuck Grassley across the aisle. A good man from iowa who recognize this and believed talked with your predecessor about how dangerous this could be. In fact, in 2004 he proclaimed that that would be the end of seem to execution of treats for many Retirement Plan investors. So mister chair, it is my understanding that swing prices currently adds an option for funds used today, isnt it true that no funds have utilized swing since the authorization in 2016 . Well, i would have to get back to you, i think that it has had limited use at most. The answer is no. If no funds have found it worthy why would the fcc mandated . It is really to address the Systemic Risk issues, and it voluntary system to do something to protect the overall system, sometimes does not work as well as when you actually have to i believe that is your perspective but we have had so many folks who have told us the opposite and i hope you would be open to hearing them, or providing feedback, comment, overwhelmingly it seems like this is falling from many of my folks, on deaf ears, i want to say what makes you believe the retailer would not believe in the same impacts and burdens now based on the decision you are proposing Going Forward . It is really a risk tradeoff but right now the American Public is holding this stress risk that our Federal Reserve might need