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Gary Gensler’s campaign for market transparency is getting more


Don’t look now, but U.S. Securities and Exchange chief, Gary Gensler, is quietly building a very big flashlight.

For more than a year, the drumbeat of retail investors calling on U.S. regulators to “do something” about the dark corners of the stock market has grown louder and louder with many alleging that the head man at the SEC was failing to do his job by not going directly after hedge funds and market makers that they believed were artificially depressing the price of meme stocks like GameStop

and AMC Entertainment

Social media is rife with users criticizing Gensler and trying to get his attention on topics that range from naked shorting to warehouse fires in Illinois, and many frame the SEC chief as inert, using his agency’s investigation into the meme stock short squeeze of 2021 as their primary evidence that he is not seeing what they are seeing.

But Gensler’s critics among the Apes of social media might want to step back and reappraise what Gensler is up to, because when you get a wider view, he’s behaving like a true power bald when it comes to market structure.

Obviously, Wednesday was a big one for Gensler. He officially proposed the most aggressive slate of new new regulations in more than a decade, moving at once on more disclosures from hedge funds and their private equity cousins, enhanced cybersecurity reporting, and his long-promised move to shorten settlement times on equity trades.

In one stroke, Gensler made it clear he was happy to alienate the private money crowd and help out zero-commission apps like Robinhood
help Robinhood really needs, but Gensler has been pretty unsubtle about his intention to do all these things for months now, and a deeper perusal of the financial news cycle shows that he actually has a much broader plan to shed light on those dark corners of the market.

In fact, if you needed one word to sum up Gensler’s regulatory kink, it would be “Transparency.”

Gensler, and those around him, have used the word so often when discussing their agenda that it has evolved from buzzword to sacramental mantra.

“Private fund advisers, through the funds they manage, touch so much of our economy,” Gensler said in a statement on Wednesday. “Thus, it’s worth asking whether we can promote more efficiency, competition, and transparency in this field.”

“Transparency” appeared four more times in that statement.

The word also pops up a lot when discussing Gensler’s likely plans for reforming the practice of payment for order flow (PFOF). He himself has used it often in his remarks on how he might change it going forward, something that would not help Robinhood’s business model, and it comes up even more when other experts muse on the topic.

“The SEC and market participants should continue to examine the ecosystem,” Gensler’s predecessor at the SEC, Jay Clayton, told…


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