SEC And Treasury Describe Budget Pressures

In testimony before the U.S. House Appropriations Subcommittee on Financial Services and General Government, SEC Chair Gary Gensler and Treasury Secretary Janet Yellen testified on the impact of market developments on agency budgets.

Mr. Gensler highlighted increased budgetary pressures as a result of the following:

• Initial Public Offerings and Special Purpose Acquisition Companies ("SPACs"). Mr. Gensler stated that a "once-in-a-generation wave of initial public offerings" has placed demands on the SEC's resources. Mr. Gensler reported that the SEC is (i) addressing guidance on the accounting implications of certain terms that are prevalent in SPAC-issued warrants, (ii) assessing whether SPAC investors have adequate protections and (iii) determining how SPACs align with the SEC's mission to "maintain fair, orderly and efficient markets."