Better Markets Criticizes SEC's New Order on Trading U.S. Stocks

WASHINGTON, D.C.— Amanda Fischer, Policy Director and COO of Better Markets, has criticized the Securities and Exchange Commission (SEC) regarding its recent order that permits unregulated exchanges to tokenize and trade U.S. stocks. In a statement linked to Better Markets’ letter to the SEC, Fischer asserted that the agency is undermining nearly 90 years of investor protection rules.

Fischer argued that the SEC's move to allow unregistered exchanges to offer 'tokenized' U.S. equities poses risks to investors by potentially limiting their ability to secure favorable pricing for trades, undermining their voting powers in shareholder elections, and complicating the receipt of dividend payments. She pointed out that many corporations have expressed opposition to the SEC's plans, indicating that they could harm capital formation, expose companies to litigation, and complicate policies aimed at preventing insider trading.

Furthermore, she highlighted that permitting the creation of 'shadow' stocks on unregulated platforms compromises the interests of both investors and public companies, while giving preferential treatment to the crypto industry. These new trading venues would not be subject to regulations that require the best price disclosure, customer privacy protections, cybersecurity measures, and insurance protections, with these responsibilities shifting to regulated stock market firms.

Fischer criticized the SEC's method of implementation, stating that it circumvented the required notice and comment process that enables stakeholder review and input on significant regulatory changes. She urged the SEC to withdraw its 'innovation exemption' and ensure that any substantial changes follow proper legal procedures and stakeholder engagement.

Better Markets is a non-profit, non-partisan organization established after the 2008 financial crisis to advocate for public interest in financial markets and promote reforms aimed at enhancing the financial system's stability and fairness for Americans. For more information, visit www.bettermarkets.org.