Bill Overview
Title: Exchange Regulatory Improvement Act of 2022
Description: This bill revises the definition of facility for purposes of regulation under the Securities Exchange Act of 1934. Specifically, the bill provides that a facility does not include any service that can legally be offered by a person or entity that is not a registered exchange.
Sponsors: Rep. Loudermilk, Barry [R-GA-11]
Target Audience
Population: Individuals and entities involved in securities exchanges
Estimated Size: 30000000
- The bill focuses on revising the definition of 'facility' under the Securities Exchange Act of 1934, impacting entities involved in securities exchanges.
- Entities that operate as securities exchanges and non-exchange service providers dealing in securities are directly affected.
- This could influence the regulatory environment for securities trading, potentially affecting traders, investors, and corporations involved in stock exchanges globally.
Reasoning
- The population impacted by the policy includes securities traders, exchange operators, brokers, and investors, both retail and institutional. These are entities and individuals actively participating in the regulation and functioning of securities exchanges.
- The changes introduced by the policy may potentially reduce bureaucracy for non-exchange service providers, impacting how securities exchanges operate and are regulated. This might result in different levels of impact depending on the individual's or entity's relationship with exchange facilities.
- The policy budget constraint means that interventions or the support required to facilitate these regulatory changes must be managed carefully, targeting specific improvements without overshooting financial limits.
- I included people not directly impacted, such as retail investors who may see indirect effects, to reflect the comprehensive environment of securities trading.
Simulated Interviews
Stock Trader (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- The regulatory change might streamline some aspects of our operations, making it easier to navigate the market.
- I'm cautiously optimistic that reduced red tape will allow for more agile trading strategies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Compliance Officer (Chicago, IL)
Age: 32 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 15/20
Statement of Opinion:
- These changes could reduce the compliance workload, which might be beneficial in terms of efficiency.
- There is still uncertainty on how exactly this will play out on a practical level.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Financial Advisor (San Francisco, CA)
Age: 62 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I believe the reduction in regulatory coverage might allow for more flexibility in how securities are traded and advised upon.
- However, there could be longer-term uncertainties affecting investor protections.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Software Engineer (Austin, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Our startup might benefit from these changes through streamlined regulatory requirements.
- The fintech sector generally thrives on progressive regulation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 9 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Corporate Lawyer (Boston, MA)
Age: 55 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 7/20
Statement of Opinion:
- This bill might change the landscape of negotiations when dealing with securities laws for tech IPOs.
- The legal implications will take time to fully understand and could present new opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Retail Investor (Miami, FL)
Age: 40 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 2.0 years
Commonness: 16/20
Statement of Opinion:
- I'm uncertain about how this bill affects me directly but I hope it brings more transparency in trading services.
- As a retail investor, any policy affecting exchanges is important for me to understand.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Institutional Investor (Seattle, WA)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Stable regulation is important for planning, but increased flexibility could also optimize fund allocation.
- This bill must be monitored to adapt our strategy accordingly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Tech Entrepreneur (Los Angeles, CA)
Age: 38 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This policy might open up opportunities for more competitive non-traditional trading platforms.
- We are excited to see how this could reduce some regulatory burdens.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Regulatory Consultant (Philadelphia, PA)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- We're expecting a shift in consulting demand as firms adjust to these new definitions.
- There might be new business from non-exchange entities needing guidance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Day Trader (Denver, CO)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 13/20
Statement of Opinion:
- Reduced restrictions might enhance my ability to make quick trades without unnecessary interference.
- I'm hopeful but also aware of the need for vigilance against potential fraud.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $3000000 (Low: $2000000, High: $5000000)
Year 3: $2000000 (Low: $1000000, High: $3000000)
Year 5: $1000000 (Low: $500000, High: $1500000)
Year 10: $500000 (Low: $300000, High: $700000)
Year 100: $100000 (Low: $50000, High: $150000)
Key Considerations
- The bill's long-term impact on the structural integrity and oversight of securities markets.
- Adjustments among registered exchanges to retain relevance and compliance within the new framework.
- Potential reactions by retail and institutional investors to perceived changes in market regulation.