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Take a Look at Gensler's prepared testimony for tomorrow! Very interesting 🚀
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| Author | Source |
| :-------------: |:-------------:|
| [u/moonwalkergme](https://www.reddit.com/user/moonwalkergme/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/n5nvq2/take_a_look_at_genslers_prepared_testimony_for/) |
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[Discussion 🦍](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22Discussion%20%F0%9F%A6%8D%22&restrict_sr=1)
I would like to summarize/highlight some of Gensler's prepared testimony for tomorrow in front of Congress 🚀🚀🚀🚀🚀
He is confirming some of the great DD here about Dark Pools:
*" January's events bring new light to equity market structure. Today, our markets essentially have three different segments. While the public generally thinks of the markets as public exchanges like Nasdaq and New York Stock Exchange, those big public markets had about 53 percent of the volume in January, according to public data. 5 So where's the other 47 percent? About 9 percent of January's volume was executed at alternative trading systems. These alternative trading systems, commonly known as dark pools, emerged following the 1998 Regulation ATS rules, taking advantage of then-new advances in the internet and communications technologies. That leaves about 38 percent, the majority of which was executed by off-exchange wholesalers, a group that of firms that have been taking a growing share of trading volume. As publicly available data on reported trades show, just seven wholesalers made up the vast majority of this 38 percent. One firm, Citadel Securities, has publicly stated that it executes about 47 percent of all retail volume.6 In January, two firms executed more volume than all but one exchange, Nasdaq."*
Holy Shit! 47% of trades not performed on the market. And of course our buddy Kenny handling 47% of retails trades, to his benefit no doubt.
Short Sellers, they are gonna get this data locked down (and hopefully some locked up) (Also later he talks about swaps and they are trying to address):
*"At the center of January's market events was significant short selling of a number of the meme stocks. While FINRA and the exchanges currently publish or make available certain short sale data, Congress directed the SEC under the Dodd-Frank Act to publish rules on monthly aggregate short sale disclosures. In addition, Dodd-Frank provided authority to the SEC to increase transparency in the stock loan market. I've directed SEC staff to prepare recommendations for the Commission's consideration on these issues."*
Reddit and other sites:
*"To be clear, I'm not concerned about regular investors exercising their free speech online. I am more concerned about bad actors potentially taking advantage of influential platforms."*
and how they are watching us (Which we already knew):
*"Furthermore, it's no longer just retail investors or even humans who are following these online conversations, but institutional investors and their algorithms. Developments in machine learning, data analytics, and natural language processing have allowed sophisticated investors to monitor various forms of public communication to see relationships between words and prices. This practice, called sentiment analysis, has picked up steam in the last couple of years, and it has grown to include online communities. With that comes the risk that nefarious actors may try to send signals to manipulate the market. This is an area for which we will continue to deepen our understanding, resources, and capabilities. "*
Robin the hood: (didn't have enough money)
*"In January, the rapidly changing prices, high volatility, and significant trading volume of the meme stocks prompted larger-than-usual central clearing margin calls on broker-dealers. Some of those broker-dealers, such as Robinhood, scrambled to secure new funding to post the required margin. A number of brokers chose to restrict additional buying activity by their customers in a variety of the meme stocks."*
System wide Risks (aka Melvin):
*"Whenever there are major market events, it's a good idea to consider what risks they might have placed on the entire financial system, even when the system holds. I'd like to highlight a few areas: First, at least one firm didn't have sufficient liquidity to meet margin calls and had to fundraise within hours to meet $1 billion-plus obligations, and several brokers chose to shut down customer access to trading. While these liquidity challenges faced by brokers didn't cascade to the rest of the economy, they did, unfortunately, affect many investors' ability to trade."*
TL:DR Gensler's testimony shows me that the SEC is moving in the right direction to curb the problems that this and other communities is pointing out with great DD. My opinion only, not Financial advice.
<https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-genslerg-20210506.pdf>