Wagner Calls Out SEC Chair Gensler’s Rule that Limits Investor Opportunities and Small Companies’ Access to Capital

Washington, D.C.  – Congresswoman Ann Wagner (R-MO), Chairman of the Financial Services subcommittee on Capital Markets, called on Securities and Exchange Commission (SEC) Chair Gary Gensler to explain the Commission’s reasoning behind recent proposals that would harm retail investors and small companies.  Chairman Wagner’s letter is excerpted below.

“I find each of these proposals deeply concerning, given the irreparable harm they will likely cause millions of investors, entrepreneurs, and small companies across the country.  However, I write today with a particular focus on your proposal to force retail investors’ orders into qualified auctions. If finalized in its current form, this rule would prevent market makers and other counterparties from executing broad swaths of trades, particularly in thousands of smaller, less actively traded companies.

“The SEC’s rulemaking experiment appears heavily influenced by ideological preferences, which favor certain market participants over others.  This approach will harm smaller and less actively traded companies that are likely to see declines in liquidity.  As a result, small companies, investors, and the quality of our capital markets may suffer, ultimately hampering job creation and economic growth.  It is not the government’s role to pick winners and losers among issuers or investors, but that is exactly what you are proposing to do.”

Chairman Wagner requested a response by March 6, 2023 and you can read her letter and full set of questions for SEC Chair Gensler here.