Carta Policy: Weekly Brief for April 1

The President released his $5.8 trillion FY2023 budget request, outlining the administration’s spending priorities for Congress’ consideration, including an increase for the IRS to improve its technology infrastructure and reforms to the SEC

TL;DR

• President’s budget proposes tax increases on corporate rate, as well as individual top rate, including on unrealized gains for the ultrawealthy; it’s unlikely to translate into law.

• SEC issues proposals to reign in SPACs and subject HFTs to dealer registration; outlines 2022 examination priorities focused on private funds, ESG, cybersecurity, and crypto.

• SEC issued accounting guidance pushing crypto exchanges to mark customer crypto assets as liabilities on their balance sheets to account for the increased risk of financial loss.

• The economy added 431,000 jobs in March, lowering the unemployment rate to 3.6% from 3.8%.

Macro matters

FY 2023 president’s budget

The President released his $5.8 trillion FY2023 budget request, outlining the administration’s spending priorities for Congress’ consideration, including significant increases for various government departments. This budget request serves as a proposal and does not translate directly into law.

Congressional agenda

The Congressional calendar is tight as lawmakers focus on Ukraine and the looming confirmation vote for Ketanji Brown Jackson's nomination to the Supreme Court. Additionally, there are plans to revive discussions on the COMPETES Act, which addresses U.S. competitiveness.

Noms, noms, noms

The Senate confirmed nominees to the Commodity Futures Trading Commission and progressed on the nomination of FTC nominee Alvaro Bedoya, who will give Democrats a voting majority on the FTC to address various technology-related policy issues.

Equity 101

Carta launched Equity 101, an interactive course teaching the fundamentals of equity ownership to help employees understand the financial implications and optimize their equity options.

Fireside chat

Join the CartaX fireside chat on April 5 at 10 am (PT)/1 pm (ET) for a discussion on the regulatory outlook for private markets and crypto, celebrating the 10-year anniversary of the JOBS Act.

Capital markets

SEC proposes reforms to crackdown on SPACs

In a 3-1 vote, the SEC proposed significant reforms to enhance disclosures and protections for special purpose acquisition companies (SPACs), highlighting the need for investor protection akin to that of traditional IPOs.

SEC proposes rules to subject high-frequency traders to greater oversight

New rules aim to require principal trading firms to register as dealers, enhancing regulatory oversight and ensuring the accountability of traders in the market.

SEC issues 2022 examination priorities

The SEC announced focus areas for 2022, emphasizing private funds, ESG issues, cybersecurity, and the regulation of crypto assets.

Crypto & digital assets

New SEC accounting guidance for crypto

The SEC issued new guidance requiring crypto exchanges to classify customer crypto assets as liabilities to better account for financial risk.

Banking & financial products

House passes retirement security bill

The House passed the Securing a Strong Retirement Act (SECURE Act 2.0) by a bipartisan vote, which would automatically enroll eligible workers in 401(k)s and raise the IRA contribution limits for older individuals.

CFPB Director recommends structural penalties to combat corporate recidivism

Consumer Financial Protection Bureau Director Chopra proposed using structural reforms as penalties to deter repeat offenders in corporate settings,

Upcoming events

• SEC Small Business Forum – Apr. 4-7 at 1:00 pm (ET)
• Senate Banking hearing: “Keeping Markets Fair: Considering Insider Trading Legislation” – Apr. 5 at 10:00 am (ET)
• House Financial Services hearing: “The Annual Testimony of the Secretary of the Treasury on the State of the International Financial System” – Apr. 6 at 10:00 am (ET)
• House Financial Services hearing: “Oversight of the Financial Crimes Enforcement Network” – Apr. 28 at 10:00 am (ET)

Notable SEC proposed rules and comment deadlines