 Thank you. Thank you all for coming. I appreciate it and I appreciate our guests here. I think you can tell which one of us is the academic by the lack of tie and jeans and our esteemed panel here from the government. There's been a lot of talk about financial technology and the revolution that's happening as we are digitizing a lot of our financial services and our financial networks and what that really means. We hear a lot from the innovator side of the equation. We hear a lot from the investor side of the equation. I thought it would be really interesting to have a panel up here to discuss what the regulatory side of that equation looks like, what you're seeing, how you can either have a positive effect on this, how do you manage the risk, all of those different things. But before we get too far into any of those topics, I'd like to just go down the row and ask you to just introduce yourselves, what your agency and maybe share a little in that regard and then we'll kind of go from there. Sorry, maybe with you, John. So my name is John Schindler. I'm an associate director at the Federal Reserve Board in the Division of Financial Stability. But I think the relevant affiliation I have is that I am the chair of the Financial Stability Board's financial innovation network group that's been doing work on financial innovation for four to five years. I helped set the group up. And financial innovation in the last two to three years means fintech. I mean, there is other innovation going on, but I've been leading the charge on the FSB's international work on fintech. Hi, I'm Valerie Sopanik. I work at the Securities and Exchange Commission in the New York office. I'm an assistant regional director in the Division of Enforcement. But the real reason I'm here is because I'm the head of the Distributed Ledger Technology Working Group at the Commission, formerly known as the Digital Currency Working Group, but we've expanded our focus a little bit in the past couple of years. And again, this is a smaller part of the fintech efforts that have been going on at the SEC. I'm really pleased to be here. Thank you so much for having us up here to talk to you guys today. Great, and good afternoon. I'm Jeff Bannman. I'm a fintech advisor at the U.S. Commodity Futures Trading Commission. I should mention, I'm sure my colleagues share this, the views I expressed today are my own and not that of the commission or its staff. So as a fintech advisor, I am 100% full-time focused on fintech, which is an important priority for the commission and the current acting chairman. I also chair our staff interdivisional and interdisciplinary working group that, like the SEC group, has now more broadly focused itself as a fintech working group. Originally, we were the blockchain distributed ledger technology and cryptocurrency derivatives working group, so we've also progressed in that. I've also been chairing one of the work streams of the CPMI IOSCO joint working group on digital innovation. And I look forward to today's discussion. Thank you. Appreciate that. And Jeff failed to mention these also jeopardy champion. But before it was cool, right? Before it paid so much money. Before it paid so much money, yeah. Like government work. Great. So as we kind of dive in and maybe we'll reverse directions here, if you could share a little bit about sort of your vision for this and what fintech really means to you. Fintech is one of those words where it's sometimes hard to capture exactly what that is, what the innovation is happening, like what falls into the category of financial technology, and what is just traditional finance, but using technology. So what does fintech mean to you? Sure. So it's a great question, Patrick. And I think it means a lot of things to a lot of people. And in fact, I really had to think about precisely that question this past January when the acting chairman asked me to focus on fintech. And part of that was to define what are the appropriate boundaries to focus on in fintech, what aspects of fintech are of particular relevance to our agency, the CFTC. I mean, there's an enormous amount of innovation taking place in US markets and around the world. And I think for any of us kind of focusing on what's relevant and appropriate and in our lanes is a critical part of it. And kind of thinking that question, I have to say just I think it'd be worth spending a moment to talk about kind of the method. I spent a lot of the last few months, frankly, just doing outreach talking to my fellow regulators, folks like Valerie and John as well as regulators from around the world who've been also been very forward thinking in promoting fintech innovation and engaging with the fintech community. I've reached out to the innovators themselves, investors and those, as well as the large institutions and infrastructures. And I can certainly tell you everybody has a different definition. I would also say that I've asked people some of whom have been around for a few years, is what's happening today in fintech different from what happened 10 years ago or 20 years ago. And in fact, I certainly would say that our financial markets really have a long history of financial sorry, a long history of innovation, you know, and technological innovation, financial industry, while, you know, it takes these things very cautiously, because it has to because economic so many economic interests and regulatory supervision is at stake, you know, has been a great adopter of lots of innovation and technology. In the markets that the CFTC oversees, you know, we have the vision of the trading pits where people use colorful hand signals and, you know, try to shout over one another. And there were rules about how close their shoes could be to the edge of the trading pit because they couldn't have an improper advantage. Of course, now all those training pits have gone silent. And those are electronic, electronic markets. So I'd say there is a long history of innovation. I'd say kind of coming back to what does it mean to us at the CFTC, I'd say that our thinking around it has really crystallized around two principle, you know, axes or themes, you know, and they one I'd say is more outward looking and one is more inward looking. So the first is, you know, how can we as a government agency, you know, with with jurisdiction and statutory mandate, you know, set by Congress, you know, how can we promote responsible innovation and fair competition in our space? And in saying that, you know, that the boundaries of that are defined not so much by the technology itself, but by application of technology, we don't regulate technology itself, its applications, entities and services. So we look at it from that perspective. And then I would say that the second critical theme of how we look at Confintech is, you know, how can technology make us more efficient and effective as a regulator? How can it make us more able to fulfill our duty to the American people and carry out our many important missions? And so when we think about what is FinTech, what is the most relevant FinTech, you know, that is what we what we think of and focus on. Thanks. I'll echo a lot of probably what Jeff said. But when I think of the mission of the BSEC, it kind of defines how we look at almost anything that comes along across our doorway. The mission is kind of threefold. It's investor protection. It's maintaining fair efficient markets. And it's also encouraging capital formation. So when we look at FinTech and what's happening out there in the different applications, again, this is a technology. How is it going to be applied? We have to look at these things through the lens of those investor protection, capital formation and fair markets, viewpoints. And so at the, at the commission, I think we've had, we're pretty lean agency, we've been able to organize within, we form working groups to look at the technology as it comes across our door. I think, for example, we had a FinTech forum in November of 2016 where we invited folks from the industry, from the public, from other government agencies. Jeff was there. And we, we looked at four distinct areas then. One was distributed ledger technology and its applications to clearing and settlement. We looked at what's typically been called robo advisors. It really is just automated investment advice. We also looked at crowd funding and peer to peer lending. So in those four categories, we've seen a lot of growth, a lot of innovation. And I think that the SEC, and again, these are my views and not the views of the commissioner or any particular commissioner or other member of the staff. I think that we welcome innovation that's good for investors and good for the markets. But we also, the core of our mission is investor protection. So we have to be cognizant of that. We have to, we have to make sure that things are proceeding in a way that, that makes sense. And that, and that investors are protected. And we hope to engage with the industry. We've been doing that. And I can talk about how we've been doing that in order to, to foster communication back and forth so we can responsibly proceed down a path that would benefit all of us and the markets. So both of my colleagues here have already given their disclaimer. So I will also give mine. I'm speaking on my own behalf. These are my own thoughts. And I'm going to give you the FSB's perspective today, as opposed to the Fed's perspective. So the FSB actually has the definition out there on fintech. And it's very simple one. It basically says it's technology enabled financial innovation that has a material effect on the provision of financial products, services, etc. I say it's simple and I think we designed that very intentionally. That definition would count something like an ATM machine as fintech. It's technology enabled. Somebody figured out how to put in code data on that little magnetic strip. And that had a material effect on the way financial services were provided. Okay. So you didn't come here to tire to hear me talk about ATMs I'm sure. But the idea that fintech is not new. And I think Jeff touched on this a little bit. I think it's very important for how regulators domestically and internationally approach this. If you approach it like this is new, oh my goodness, what are we going to do? How do we attack this? That makes you start all of your thinking new. But I think it's healthy to look back at all these technological innovations that have affected financial services throughout the past decades and look at how you've addressed that. Now we have maybe an intense cluster right now. We could talk about why that might be. We have some technologies that might be more transformative than other technologies. So I think we can talk about something like that. At the FSB, our perspective is financial stability. If it wasn't, then we have a really poorly chosen name. Obviously, okay, the Financial Stability Board wouldn't make sense otherwise. I think one thing that people think about when they think of the FSB, if they think about it at all, is risks. They're focused on risks. And we certainly do spend a lot of time thinking about risks. But with financial innovation, we have a very balanced approach with any innovation, be it fintech or not. We say what are the financial stability benefits of this? What are the financial stability risks that are associated with it? So we try to sort of weigh those two against each other. So we've been looking at different fintech innovations in isolation. Let's look at DLT. Let's look at artificial intelligence. Let's look at peer-to- peer lending. But we've also been taking a holistic approach of sort of what is fintech doing more broadly. So but we're trying to take that balanced approach, look at the individuals, and also look at that broader approach. Great. Thanks, and just to lay some ground real soon. As we have this discussion, I hope it will be somewhat informal. And if there are questions that are topical, feel free to raise your hand. We'll just bring them into the fold as we go. If you have more general questions, we'll save those for maybe the end. So don't be bashful if you have something to say. Raise your hand. I'll come to you with the mic. I'll be the Phil Donahue of this. Fintech's Phil Donahue. That's what I strive for here. I think you need a more up-to-date reference. Yeah, I probably. It just shows, like, you know, exactly. Telling. So you mentioned the clusters. Like there might be some interesting clusters of innovation happening now. There might be a little bit unique as opposed to some of the historical, like, transitions that have occurred. I assume we're talking about things like distributed ledger technology. We're talking about things like AI and machine learning and these approaches to decision-making within the financial sector. How do you... Is that a real thing? Are we really seeing a cluster of innovation that's happening right now that is a bit distinct from some other historical transitions that have been a bit more subtle? I know you're eager, but I want to start with Valerie. I think so. I think in our industry, there are the four areas that I've mentioned. I don't know if they're organically forming that way or if they have connectedness that I'm not aware of, but, for example, the robo-advisor. We have investment advisors that are trying to take advantage of efficiencies and cost savings and accessibility to a number of folks who are not probably the millennials who want... They don't necessarily want to interact face-to-face with an investment advisor. They may want to interact through a mobile app or through a website. They just want to get their investment advice, have their investments made with not a lot of interaction with a human being. They're comfortable with that kind of interface. And so I think that's been popping up as the generation of individuals who are looking to invest now and hopefully have some disposable money, but money that they can put away for the future. But they're used to dealing with things in a different way. They're used to technology. They're used to sitting there with their devices. Not necessarily what we're all used to. So I think naturally you're going to have innovation happening there. What we want to make sure of at the SEC is that if somebody is an investment advisor they're held to the same standards that any other investment advisor is. Whether or not you're required to be registered under the Investment Advisors Act because of the amount of assets that you manage or you're just subject to the anti-fribe provisions generally because you owe fiduciary duty to your client. So I think in that respect we're seeing an innovation because there's a market for it. There's a group of people who want to interface and get kind of automated investment advice. And we're fine with that as long as the advisor who is, I'll just call the robo-advisor for short, we call them automated investment advice, is adhering to the principles that they should be adhering to. Are they considering what kind of information they need to get from a client, even if it's through a web interface, to give them the kind of advice that they need to get. The personalized advice that really comports with what are your investment horizons? What are your investment objectives? What else do you have on your plate? What other investments do you have? Do you want to buy a house? Is that why you're doing something in the financial markets? Do you want to save for later? Do you want to retire with this much money? So we want to make sure that these automated advisors are collecting the information they need. We also want to make sure that they're explaining to their customers, you know, this is how we work, whether we're in algorithmic trading or high frequency trading or some other kind of trading pattern. This is how we work. These are our limitations. These are the risks. What's going to happen if there is market stress? Are we going to have a human takeover at that point? So we want to make sure that they are disclosing fully the products that they're offering, the services they're offering and the mechanisms they have in place to address risk. And we also want to make sure that they have compliance in place. They have systems that ongoing are analyzing their business, their business model. Are they giving the clients the services that they promise they are on a going forward basis? And they're putting adequate resources into that. So that's just one example. I think you have peer to peer lending and crowdfunding. Now crowdfunding is something else that's coming on because I think a lot of people, there is a market for people to make smaller investments in an easier way. And so the Jobs Act, through the Jobs Act, there were several new capital raising mechanisms set up. One of them is the 506C capital raise or the A plus raise and then crowdfunding, regulation crowdfunding. So these are all kind of new mechanisms we have to make available capital raising mechanisms in the market. And I think it made sense that those things came along because I think people were looking to jump start, the Jump Star Business Act, jump start capital raising and small businesses in the country. And then the DLT phenomenon, I talk about that more, but I think that's an example, I think of a really disruptive kind of event that happens almost like the Internet. Something comes along that really is revolutionary. And in a way, a lot of people say it's a solution looking for a problem. There's just so many possibilities. And I think many people are exploring, of course, in the financial industry, you're going to have either financial intermediaries that already exist, trying to figure out how they're going to put it to use, or you're going to have startups coming in and saying, can we make inroads into this industry and offer services and products that weren't available before? So those, I think, are the four areas that we're seeing naturally popping up. All right, John. Ready? I'm ready. Patrick knows that I love to talk about this stuff. In terms of, are we seeing a cluster of innovation? I think the answer is yes. Let me give you two different quick conceptual frameworks to think about this. I think it was Will Rogers who said, you know, you could teach a parrot everything you needed to know about economics if you just taught him to say it's all about supply and demand, right? And I think that's what it is in the case of fintech. Okay, there are supply factors that lead somebody to offer a new innovation. There's also demand factors. Valerie mentioned like the millennials, they want convenience, right? One of the supply factors is the technology. We didn't have this mobile technology before the financial crisis or it quite hadn't quite gotten adopted to the same extent. But there's also other factors that cause innovation to take place. Things like big financial changes, big economic changes. Okay, that shifts the way the financial markets function, or that shifts the way the economics, the economy functions. Before the crisis, banks didn't own lots of rental houses, but now they do because they foreclose on a lot of people, those are rented out. Now they have lots of rental income so they can create a rental income securitization. Didn't exist before the crisis because they couldn't do it. So big economic shifts lead to different products and services being offered. Okay, another thing that makes change is regulation. Clearly, there's been a lot of regulation. Anybody who's not aware of that has been sleeping for the last eight years. Okay, this has been a full-time job for everybody on the panel basically. Okay, so if you take the technology, the economic changes that we saw, the regulatory changes that we saw, the changes in the financial landscape, you add it to millennials and other demand. You just have a tremendous supply of the stuff and a demand for it. So you're seeing this combination. Often we have one or two of the factors, but now we have so many of these supply and demand factors. And then my other conceptual framework. Okay, if you think about traditional financial innovation, okay, somebody has a corporate bond and somebody else says, well, I'm going to make that callable or puttable or renewable or extendable. But nobody looks at that and says, wow, this is an amazing new product. I've never heard of this before. It's a corporate bond and it's got some new adjective tactile under the end, right? Every once in a while, somebody comes along and says, you know what? I'm going to make a deeper change. I'm going to come up with a new product. I'm going to use the infrastructure we have like the bond market infrastructure or the swap market infrastructure and I'm going to create something new. Somebody says, I've got all these these different assets that I'm holding and they all pay income. So I'm going to gather them together and I'm going to collect them into one unit and then I'm going to pay out all that income in a very structured way. Okay, I can sell this like a bond, but it's not a bond. It's nobody's obligation. I've now created a securitization and now I can do innovation on top of that. So I can innovate by adding all new features. I can make it callable, extendable, renewable, potable, etc. Okay. So there's that feature level of innovation most common 90 plus percent of all new products are just tweaking the features that genuine new product that nobody has seen before a few percent. And then every once while somebody says, you know that infrastructure that I built all those products on. Let me see if I can change that. Something like distributed ledger technology says, you know what, this is not a product in itself. DLT is not a product. It's this infrastructure that I can build things on. So let me take out this infrastructure I've been using to build my bond market or whatever it is. I'm going to put a DLT there. Now I can come with all sorts of new products. I can come up with virtual currencies. I can come up with smart contracts. And I know you're a version of that word. I'm sorry. Everybody understands the word though. DOWS, I can build all these new products. And then I can innovate on top of those and I can build callable, extendable, you know whatever it is that we're going to do. We don't even know what that level is. So when you get that deep level of innovation, I think the power to transform is so much bigger because then you get new products built on top of that. Nobody knew what a Dow was two, three years ago. Maybe somebody in one of these campuses did. I didn't, you know. And so you have much greater power. I use the word transform. But I think those two conceptual frameworks give us sense for why we have so much innovation right now. We always have innovation, but it seems like there's a cluster and why there might be this greater potential to transform the financial services. I cut it down as much as I could. But I'm too excited about pollution. Yeah, I'd like to add to it. I mean it goes great and I think we think we tend to agree with each other about a lot. But I won't try to repeat that. But, you know, I think something that's kind of kind of enabling or accelerating that, you know, these these, you know, two constructs that John spoke about. I think there's a convergence what I would call a great convergence, a convergence of maturity of a number of technologies working together. So let me give two examples of that. You know, I think one of the great convergence is that that's driving a lot of this, you know, transformation or at least transformative potential is open source software and cloud computing. Now, neither one of those things started in 2017 or 2016. But what has happened is that both of those, which go back a number of years, have been advancing to the point where it's just amazingly fast, cheap, you know, an innovator can come up with an idea. And it used to be, you know, 15 years ago, if you were a what we would now call a fintech innovator, you'd come up with an idea and then you'd sort of eventually get some money to fund it and it would take you, you know, a year to build a prototype of that. You know, now it can take you, you know, weeks or even days. So the pace of innovation, the ability to kind of take ideas and transform them into something concrete that people can, you know, kind of put their, you know, kind of roll up their sleeves and really kind of work with, you know, that pace has accelerated tremendously. It's because, you know, this convergence of open source software available to everybody, cloud computing it means once you have your thing, you can kind of put it on the cloud, you can scale it up, you know, you have variable capacity, so there's efficiencies to grow and build it. So I think the convergence and maturity of those factors is one of the real accelerators. It's really helping all these startups to put pressure, to put this kind of creative or disruptive tension on everybody in the marketplace. I think the other is convergence in maturity of some of these other technologies that we've been talking about. I mean also AI and machine learning, you know, didn't just start in 2016 or 2017. You know, distributed ledger technology, you know, it's, you know, kind of the blockchain version was invented in 2008, but distributed ledger as a kind of construct has existed even before that. But it's kind of the combination of these and sort of all in conjunction with one another are what are really producing this effect. And then I think you combine this with kind of some of the dislocation from the financial crisis which resulted in actually a lot of great human capital, human capital, really knowledgeable people from all these markets who understood, you know, how a lot of the plumbing worked. All of a sudden, you know, they, a lot of these people were out of work looking for opportunities, thinking about, you know, what, what can I do? What can we do better? And so I think it's this combination of the dislocation, the availability of human capital and centers around the world, you know, this kind of great convergence of technology maturity that's driving all these things. I think there's an increase in global industry driven collaboration that I haven't seen before. It's not, it's not academics and industry working together. It's really these big consortia of, you know, the global consortia really of folks getting together in the DLT space and really trying to find an application that makes sense. They might be working with Australia. They might be working with Singapore, but they're coming, they're coming together and they're, they're cross talking. They're not being proprietary about it. They're, they're putting it all out there in open source and they're collaborating, I think a lot more than I've seen before. You know, it's interesting. So we talked about this really transformative or the potential for it, right? One of the risk factors when you have a really deeply transformative technology is that the existing regulations just simply will not permit it to gain sufficient, sufficient market share to really have an impact and grow and displace the existing infrastructure that is there. How much does that factor in to sort of your, your, your, your thinking or your analysis of how this goes and where does that kind of lead you when you think about how to regulate for the future? And so we check this. Okay, sure. That, that's, that's a terrific, terrific question. And it's a concern, right? If there's, you know, all this, all this new technology that has the potential to transform our markets, build growth and prosperity, you know, are we as regulators standing in the way of that, you know, on, on, you know, one certainly important component of our, of our job as, as, as regulators is not just to be cheerleaders, but as, as, as Valerie pointed out, you know, we, we are responsible for a safeguarding, you know, customer protection over safeguarding market integrity, monitoring and looking out for systemic risk. And, you know, we have those duties that are, those are vital duties for us to carry out and as the financial stability board is, as well as John. So, you know, we need to do those things, but, you know, these are questions we, we absolutely are asking ourselves at the CFTC. And, you know, it's something that we hope to learn as we kind of deepen our engagement with the innovators and we get actual hands-on experience, you know, with, with the innovations and see as they show us their innovations as our staff looks more closely as we have better and more regular modes of reaching out, not, not just to kind of the, you know, kind of the most established, but even kind of the newest innovators in this, in all sorts of corners of creativity and, you know, to see what their, what their innovations are, you know, do they challenge our rules? Do they comply with the, you know, with the spirit, but not the letter of our rules? And, and something that, you know, that I believe is that, you know, if we just sort of sat back in, in our offices and did our own kind of review of our rules to kind of think what, you know, which rules are, you know, the ones that, that might cause trouble for innovators. We might come up with our own list, but, you know, I think that, you know, having an approach that really engages with the innovators and we see which are the things that are coming up again and again, I think will help us learn from the innovators, from that engagement, you know, what, what are the ones that we should really be focusing and considering whether some sort of flexibility or change is needed. Sure. I think that it's always a question whether we need to reform our regulatory scheme in any way when something comes along. The way these new, new technologies are hitting the SEC are kind of in pockets of, you know, if a new application comes in for a product that's listed on exchange, it might go to our Division of Trading and Markets to review if a new offering is, is proposed that involves, for example, digital securities, it would go to our Division of Corporation Finance to review. The way things kind of hit my desk, I'm in the enforcement division. So early on, you know, our first kind of exposure to DLT was a Ponzi scheme that was involving Bitcoin. So it was straight up Ponzi scheme, someone was taking Bitcoin in, promising outsized returns based on some arbitrage they were going to do in the market. And we reacted like we always react when there's when there's some apparent fraud, we did an investigation and we filed a case. Our anti-fraud provisions are extremely broad. And so we didn't have any problem fitting what was going on into the context of, of this new kind of technology. In other parts of the SEC, we do have regulations that are a little bit more tailored to products and, and systems and services. But for, for a large part of those things are very principle based. So it's not like we're prescribing exactly what needs to be done in every situation. That would be very cumbersome and difficult for a regulator to do. We have kind of principle based approach to things. And so far, we've been able to analyze things as they come in using the current regulatory framework. That said, we have been asking for comments from the public when we put out new rule makings. For example, there was a concept release that had to do with transfer agents where the commission invited comments as to how DLT could be used in this context and how could it be used consistent with the federal securities laws. And so we invited comments from the public and from industry on that point. Again, there was another rule making involving the settlement times, whether, you know, we're going from T plus three to T plus two to T plus zero or whatever. We wanted to know how DLT could be integrated into that. We, we asked for comments from the public. So this is a process that we're going through so far. I don't think we've we've seen any gaping regulatory holes or things that need to be fixed. But I'm not I'm not here to say that's not going to happen. And I think that we are approaches to always try to solicit information from the public and to to work with. You know, startups and folks who've been in the industry for a long time alike to see what's going on out there, what challenges they're facing. And if there's a roadblock or a barrier, does it make sense for us to to rethink some solution? So let me share a little story with you to introduce, you know, how we started thinking about the regulatory side of this. Is a couple of years ago when we went at the FSB, we started doing work on distributed ledger technology. You know, if you think two years ago, there wasn't a lot written about blockchain unless you wanted to read the original white paper, that sort of thing. But I started reading what I thought was out there and grabbed all this stuff. And I got knowledgeable in the lingo. You know, I started calling people, some of the people in this room, I probably called probably called Patrick and Michael and Rob and folks like that. And, you know, I knew the lingo. I had my list of questions and I was talking to this one guy at a blockchain firm and I'm like, blah, blah, blah, blockchain, blah, blah, blockchain. And he stops me and he goes, you're asking me about blockchain. He's like, you're asking the wrong questions. Like, you've got to be talking about side chains and this. I'm just like, the heck is this guy talking about? Did I admit that I don't have any clue? I was so proud of myself for being able to speak this lingo. And he was telling me I was behind the times. And, you know, I admitted that I didn't know what he was talking about and he explained it to me. But what it illustrated to me was, you know, industry outreach has to be a huge part of what you're doing. If you're relying on reading this stuff, it's six months old by the time it actually gets depressed. So when we came up with the strategic work plan at the FSB, one of the four pillars was industry outreach. Actively engaging, keeping up to speed on the technology as it's developing. And that's been a huge help in just, and I think everybody here is doing that now. And if I throw some data out of this, the FSB sort of did a stock take of its members and said, OK, what are you doing on the regulatory side of FinTech? We even asked a broader question, are you doing anything? Are you planning to do anything? Have you decided not to do anything? Almost everybody was in those first two. OK, we actually had a couple of people said, no, we have decided not to do anything. And they did it for a couple of different reasons. One, because FinTech was too small in their jurisdictions, which I think they might have been wrong about. But based on their data, that's what they said. And others said, you know, our laws are completely based on activities, financial activities. Therefore, all we got to do is classify which activity you're performing and then we're good to go. Great. But most of them said they were doing things. And then we asked them for more detail. What are you doing on the regulatory side? And of the 73 or so changes that were either in place or planned when we took this survey, I would say 90 percent of them were things like creating definitions. What is a virtual currency? Is a virtual currency a currency? Is it a commodity? Is it something else? Others were clarifications. This is a new activity. You will be regulated by this institution. Maybe in the UK, it's the FCA, maybe it's the Bank of England, whatever it is, issuing clarifications like this. Very few of these regulatory actions at the time were anything that might be viewed as restrictive. An exception was China, where the peer-to-peer lending market grew pretty big. There were some unruly practices and then they put some controls on that. But there's a lot of action already, but most of it is sort of acknowledging that wow, this is new. You know, we haven't seen this before. We have to create some definitions and clarifications of our existing rules just so we can start the process of saying, OK, now that we know that you are a currency or you are a commodity, here are the rules that are going to apply to you and then it's an evolving conversation. So a little bit of data. Please come over with me. It's good. I'll get the blood flowing a little here. I'm trying to water it. Thanks. There's a, I've seen some data to the effect that the aggregate assets of the major US bank holding companies are something like 61 percent of the US GDP. I mean, I think that's the top 10 or about 50 percent of the US GDP. My question is the how this has come to pass. It's just I understand it's probably a very large question, but also in the IPO in the in the formulation of new incorporation processes. There's a holding company parent usually or always. I'm not sure because there's very little discussion of this in the anywhere that I have been able to find. There's a parent company holding holding company and the the new corporation. The holding company is supposed to hold a certain percentage of the outstanding stock stock common and preferred I presume of the new newborn corporation. I've heard that the estimates of the holding company stock are from 80 percent to 20 percent. And I and I don't know whether it varies in each case. I don't know what the law is, but perhaps some of you or all of you have some knowledge and expertise in in in in this matter. I don't know if there's a FinTech angle to that, which would be where I might be able to offer some insights. I has to do with regulation. Whether whether it's happening automatically or forward. That's the only yeah. I mean, that's outside my zone of expertise. Unfortunately, I can't answer the question for you. Are you talking about specifically about bank holding companies and bank subsidiaries? OK. Yeah, I'm not sure the FinTech angle either. But I have seen what you're describing restrict how much invite anybody who's the bank holding company person. It's an interesting question though, like how much of company a bank can hold in the commerce versus banking distinction? I was curious if you've seen a shift in the size of the companies that you're dealing with as a lot of startups come to the space. You know, is that or those companies getting smaller when you first start talking to them? And how do you do you interact with them differently? Do you know, is it different talking to a startup than it is talking to a big bank who might both might be doing blockchain initiatives. But one is approaching it as a large institution and one is just trying to get their feet on the ground. Please, Jeff. Sure. That's that's very, very, very interesting question. And, you know, the you know, I mean, our you know, I'd say in general kind of CFTC staff, you know, tries to make themselves available to people of questions about our rules, whether it's kind of the largest kind of, you know, types of entities that we regulate, whether it's, you know, banks, clearing houses, exchanges, you know, data repositories. But I, you know, I think something that that you find just that as these institutions grow larger, you know, the people who are they typically have people who are the ones who are designated or authorized to talk to the regulators. I think there are a lot of reasons for this that probably make a lot of sense in terms of, you know, expertise or risk to the institution or potential, you know, implications of saying the wrong I could speculate about that. But, you know, typically you see people who are who are a little more specialized, you know, as as we have been doing this outreach and, you know, we've set up a staff working group that, you know, said we kind of broadened its focus a bit. But, you know, we've been meeting with with companies since 2015 in that framework. And in the last few months since I became full time focused on fintech, we've been doing an enormous amount of outreach, you know, and, you know, we're talking to companies that often have, you know, kind of one to five people. So they haven't, you know, got a specialist in, you know, whose job it is to deal with, you know, folks, folks like us from the regulatory side. They're working on defining their offering, that offering may be shifting. They sort of want to understand that, you know, part of the challenge for them may be they don't even necessarily know exactly what the question is that they need to be asking or how to frame the question. I think that's one of the ways that actually those early conversations can help them, you know, not waste a lot of time and money, you know, they can sort of, you know, get some kind of guidance or a bit of a steer along the way. And I think some of the programs that other regulators have developed around the world, I think have been helpful. But, yeah, I mean, we've literally, you know, met with, you know, one guy in a hoodie to, you know, representatives of the largest exchange and clearinghouse and financial institutions around the world. But, you know, we're seeing more of it. And, you know, and in terms of the kind of the, you know, just the size of the organization, I mean, we don't always know exactly kind of the number of people, but, you know, kind of partly because some of the factors that I talked about earlier where, you know, you can have just a really small number of people, you know, you don't need the team of developers you would have needed five, 10 or 15 years ago to get your prototype built, you know, like three people, you know, so these companies have something sort of at least a minimum viable product or something that they can talk about and show us or show potential customers so much earlier. So I would expect that trend to continue. I just add a few thoughts to that. If I were to divide up the FinTech universe, I'd say there's sort of three broad categories. One is the pure FinTech. This is your proverbial two guys in a garage building something, right? They're programming a blockchain or something like that and they come up with an idea. They have no financial savviness, right? A story of a colleague of mine who said these folks came in to show them, hey, we've got this blockchain, we created this security and we traded over this. And the guy said, well, you realize you just admitted to violating securities laws, you know, in this country. And I'm like, oh, geez, you know. So I mean, that's the kind of folks there. And then you've got the FinTechs that are a little bit more established. They're financially savvy. They've probably got some former SEC or CFTC or Fed folks or, you know, Bank of England, whatever country you're in. So, you know, they've got this technological capability. They have got an idea and they brought in some financially savvy people. And then you've got the incumbents, the big financial institutions. And you asked about the shift. And I would say the shift that I have seen is two to three years ago, it was mostly these first two that I was talking to. The banks had, like, somebody over in the innovation lab or something. And, you know, they, oh, yeah, those guys over there, they're doing something with this blockchain stuff or something like that. But now I spent so much more time talking to the big incumbents because now it's 38 people or a whole department. That's a shift that I've noticed. Maybe they're just talking more than they did in the past. But it was, they were, like, shunted off to a corner before, whereas now I think I hear from those a lot more often. I don't know how that compares to your experience, but. This is a follow-up on John's previous comment about the fact that most regulators are currently making definitions and not really restrictions. But if you define someone as a bank or as an adviser or as a lender, then, by definition, you're also imposing a lot of restrictions. You're sometimes reallocating the market. So in fact, isn't that actually the most crucial point of whether now these are going to be banks or are these going to have to be affiliated with banks? And accordingly, the equivalent restrictions on their activities and limitations, and especially if we connected to the previous questions, what happened if you define a 10-person company as a bank? Now they have no ability to compete with this division of the big incumbents and no ability to enter that market. So a few thoughts that I would throw out there. One is that something that I think has been remarkable in looking across the jurisdictions internationally is most of these are regulators and their job has typically been to prevent companies from doing something or insisting that companies do something. It's a very restrictive sort of mindset, right? But with innovation, there's been this movement recently to be much more facilitative, right? There's innovation hubs popping up all over the place, regulatory sandboxes, trying to make it easier for people to innovate. And that sort of mindset, I think, has also been reflected in some of the changes that I mentioned, OK? So in terms of things like the definitions, one of the things that a lot of these companies that we talk to are always complaining about or bringing up is the regulatory uncertainty. I've got this idea. I want to trade this new thing with this new product, but nobody can tell me who my regulator is. So just by telling them, you know, talk to Valerie, that has helped them out. So it might seem restrictive because now they've got Valerie's rules or Jeff's rules. It's a big help to them in some ways. But a lot of the rules have actually been to help them. In Switzerland, for example, there was a banking law that said something like anybody who collects deposits from 20 or more people is a bank. It didn't matter whether those deposits were $5 each or $10 million each. You were a bank. So the Swiss went and changed the rule to sort of clarify that, no, you've got to have big deposits here, which meant a lot of these peer-to-peer lenders. All of a sudden, they were no longer being accidentally qualified as banks. So I think there's been this effort to sort of eliminate the uncertainty, which is a big help to the two guys in a garage or the more financially savvy FinTech folks, or to clarify that you are not yet subject to this regulation, even though it might have appeared that you were. Now, I'm speaking broadly about 26 jurisdictions that I have information on. And I'm not speaking for the US specifically, so. But I think there's still a sort of facilitative movement out there, properly balanced with an understanding of the risks and that sort of thing. I'd like to just add an additional perspective. And I'm talking about something that's not specifically our jurisdiction. But just to have a regulatory status of a particular thing is not necessarily always a bad thing. There are typically benefits and detriments to having that regulatory status. And part of the value add and the process that a regulator can add is to help the potential innovator understand if I'm a blank. These are the factors that the staff looks at based on the rules to determine whether you are or you aren't one of these. And here are the duties and responsibilities and the expectations. But for those of you who are following FinTech, right now there's a bit of work going on. The Office of the Controller of the Currency has proposed a FinTech charter. And a number of the states which regulate some of these entities within their individual states have raised objections to that. And litigation has been followed around this issue. And I'm certainly not familiar where they're going to comment on that litigation. But I think one of the issues at stake here, which is a matter of concern to the states, is that if you're an entity that has one of these OCC national FinTech charters, then that allows you to go in and do business in all 50 states. So actually having a regulatory status, it's like a passport for full faith and credit across the country. So it's not necessarily a negative thing to have one of these regulatory statuses. And I think a lot of there is regulatory uncertainty in this country and others. This country especially has quite a large framework of regulations that could apply to any one individual undertaking activity so that someone might be subject to, you know, FinCEN for Bank Secrecy Act requirements, maybe subject to the SEC if it's doing broker-dealer stuff, maybe subject to state regulations. But all these things are a big patchwork. And I think for a lot of these firms having someone say, OK, we're going to claim this as our own is going to be helpful to them. A lot of people are asking for that. Unfortunately, agencies can't always move as quickly as folks in the industry would want. And there's reasons for that. Not only would we not want to act precipitously without all the relevant information, but sometimes you want to, you know, deliberation has to occur within the agency. Or you may want to take in certain circumstances a wait-and-see approach where you can see how the industry develops. So you don't want to jump in and set a standard and stifle what might happen and what might be if you weren't there. So I think it's a really delicate balance when you regulate. And I do think just from my interactions with the folks here and other regulators that I've been dealing with who are looking at FinTech, we are trying to be deliberative and talk to each other and talk to folks in the industry and maintain an open dialogue not only with the folks that we talk to all the time that we regulate, but also with the startups and folks that may not have known who we were six months ago. Question regarding some of those well-established institutions, that they may have some FinTech initiatives going on, maybe on the front end. But how that connects with the overall digital strategy for the firm, how well things are connected there, like about the core competencies, like compliance risk, how this is connected with the most advanced areas of those institutions. Do you see this happening? Is this part of a strategy? Is the question, how are these things interconnected within the agency? I think there's much more of an effort now, especially after the financial crisis to break down silos within agencies. And so that there are these big working groups being formed within the agency that not only communicate within the various divisions and offices, we all want to keep track of what we're all doing in the FinTech areas. And we all want to speak with one voice when we talk to folks or liaison with folks in the industry. We also try to connect with the various sibling regulators that we have either on the law enforcement side or on the financial regulatory side. So much more collaboration and crosstalking. I begin to cross agencies, right? I mean, that's another part of the problem is if I'm not sure whether what I'm trading is a regulated futures contract or security and sometimes that can be hazy, how do you make sure that you can gain the proper certainty to operate by identifying, as John said, who your regulator is and how much crosstalk is there between agencies right now and how much more does there need to be maybe to extend your question? Well, we all know each other. So that's good. This is a start. This is a start. I just had another thought to your question, which is the way I described it like the innovation lab guys, they were over there. I mean, I think they're getting brought in. But just anecdotally, I was talking to a big bank that has they've been doing their credit risk scoring both with their traditional methods and with some artificial intelligence methods. And the guy I was speaking to was in charge of this project and he was very frustrated because over three years he had shown that his credit risk modeling was doing much better than the traditional modeling. But we have a reputation for moving slow. But the chief risk officer said, we're not switching to that model. I don't understand it. That's it. He's sort of like, you know, this is not fair. You know, I've shown it. It performs better. So I think, you know, it's, you know, they're experimenting, but it's going to take them time internally to get comfortable with a lot of this stuff. Some of it is percolating up. I think the DLT, the consortiums, I think Valerie mentioned earlier. We're seeing a lot more of those. So there is there's money being poured into these projects. So it's part of this long term thinking. But I think it's going to take them time to get comfortable with it, too. I won't make you answer this, but it raises a point that comes up a lot around here when we think about AI, which is interpretability. If you can't get comfortable with understanding how the algorithm makes a decision in the first place, how can you ever get comfortable with actually applying it in a very highly permissioned, regulated environment like financial services? But there are different levels of interpretability among AI ML. It reminds me a little bit of casinos inventing new games in order to attract customers who are ill-informed about the nature of those games, what the odds might really be. That's a certain degree of, well, I guess you guys are all regulating for public benefit. And I don't see any sound method of evaluating what the net public benefit might be of any of this new invention. I see that there's private benefit. People who invent it, some of them get rich. They push it. You guys are supposed to be looking out for social benefit, cost-benefit analysis anybody, measuring benefits to consumers, other than by demand, which after all for casino games, there's a lot. It's very challenging, right? If you had the product here and it was operating and I could say, well, here's five years of data and I can study it and I can see, well, this many people lost money, this many people gained money, then I could do a great study of it. But what you're doing is you're taking something and saying, here's my idea and here's how this would operate. And then what I have to do is I have to take what I know about financial vulnerabilities. Will this add to leverage, maturity transformation, risk transformation, interconnectedness? Will this, if it grows and becomes a permanent fixture of our financial system, will this grow into something that will be a problem? And I can't answer that question necessarily. I can sort of project, OK, here's how this product functions, because we know how lots of products function and we can look at the similar features. But you're correct. I can't sit here and tell you, well, this is a net gain of 0.7 for consumer protection. It's a minus 0.3 for overall risk. But I can do some of the analysis. I can look at a DLT transaction and say, well, if I were to transform this to DLT, I would take that settlement time from three days to one day. That's a reduction in the exposure that I have to Valerie, because I don't have to worry about her failing over the next three days, just over the next one day. So there are pieces that I can analyze. But projecting how that will be over time, you're right. That's extremely challenging. And if anybody gives you the definitive cost benefit analysis, I'm pretty sure you can pitch it over your shoulder. Now, if I can add to that, I mean, you know, the boundaries of, well, first of all, I absolutely agree with your opening premise, which is that, you know, we have a public duty. We have a mission to the American people who, you know, pay our salaries. And, you know, for whose benefit we engage in the work of our agencies. And, you know, I would say, you know, generally speaking, that the broadly speaking, our missions are, you know, kind of customer protection, you know, preserving market integrity, you know, and trying to safeguard financial stability and monitor and prevent against systemic risk. Now, having said all that, kind of the boundaries of where we can exercise our judgment and where a staff member or the CFTC commission can come in and look at a situation and say, okay, we've done a cost-benefit analysis of that and we don't think it's a good idea so you can't do it. Really, the boundaries of our authority are set by Congress and there may be areas where, you know, because of our subject matter expertise, we could add value to a particular question. But we just have not been authorized, you know, if something does not offend market integrity or offend customer protection to the point where it really, you know, violates our statute or regulations. So, you know, for example, our derivatives exchanges which list futures contracts, you know, they list new contracts every day in hopes that they will be commercially successful. You know, most of them, nobody trades them and are not successful at all. You know, technology in part has made that possible because it's much, much easier and they obviously have to comply without rules. But if the futures contract turns out to be a dumb idea and doesn't really, you know, doesn't hurt anybody but nobody likes it, you know, then it just kind of goes off into the sunset. And, you know, we are really not empowered to say, you know what, you know, futures exchange or entrepreneur or shareholders, we don't think it's a good idea for you to do that. We will be offended because, you know, the benefit that that will bring the American people does not outweigh the harm. You know, we have sort of boundaries of our jurisdiction that are set and, you know, we can't just sort of weigh in and express our opinion about everything. Where it's part of fulfilling our mission and our statutory responsibility, we'll certainly take that very seriously and do it. But there will be situations that are, you know, beyond that scope and where we should not exercise authority we don't have. Yeah, along those lines too. It's hard to regulate a technology. We kind of have to wait until something is reduced to some embodiment and then comes to us as an application of something. So, for example, if someone wants to offer digital securities, they would go through the typical Division of Corporation Finance review of their registration statement. And there's a framework that the staff of the Division of Corporation Finance uses to look at that as a full and fair disclosure of the offering and its risks. And it's not gonna say to the public, we think this is a great investment. It's just gonna say, does this registration statement meet our standards of full and fair disclosure? And if so, we can deem it effective. If an exchange comes to us and wants to trade or list a new product, and that product involves DLT or some other innovative technology, they have a different set of standards. They need to go to our Division of Trading Markets and prove that that they can protect the fairness in the markets, that it's not gonna lead to manipulation or fraud, that there's two or three, four standards that they apply in each case. So, these standards are set and they can be applied once something comes to us. But a lot of people are just coming in with hypothetical use cases, not really reduced to anything. They don't have all the details worked out so we can engage with them and help them consider what they need to consider. But I think it really would be behoove industry to also think about how can we address the protection of investors? We have an opportunity here in this new burgeoning area to come up with standards that do address investor protection and integrity and take care of things like AML and KFC where it's applicable. And that way we don't really have to worry about the SEC coming after us when we don't do it. So the proactive approach by industry would be something that I could suggest as a good way for people to approach this thing starting from the ground up, using those principles and working them into the embodiments that they come up with. Michael Casey from MIT Media Labs Digital Currency Initiative. This is a question for Valerie but I'd certainly like Jeff to weigh in as well and it's got a kind of a specific and a theoretical dimension to it. It really draws upon some of the stuff we've been talking about. You're talking about things that have to take this embodiment at some point. We're looking for definitions and so forth. And I'm wondering specifically about ICOs, I'm sure you're aware of all the talk in the digital currency world about these token issuances and how they should be defined. Are they securities? To be it registered and so forth. And I'm wondering, first of all from specific from the SEC, what, I don't expect you to give me specific answers on your rulings, but I'd really like to know what you're thinking about this, what, if you could give some sense of how you're framing the discussion right now about how to define these things. And then the theoretical component of that is like, is there a point at which things simply can't enter the pre-existing definitions? Where we're a token for example that has some of the qualities of equity, some of the qualities of a product, some of the qualities of a currency is morphed together because we now have this thing called the programmability of money, where software is now transforming the very notion of what money is. Is there a point at which you just simply have to say, we really need a whole different framework here and let's go about designing that context to do with this because that's square-pair ground whole problem. So in that sense, that latter part of the question is really for really all three of you I suppose. I guess I can take the ICO thing. It's definitely something that we're looking at and something that we're paying attention to. Whether or not something is, first of all, if something is a security, it needs to be registered, the offer and sale of that security needs to be registered. Otherwise it's an unregistered offering, that's illegal. There are some exceptions to that. If the offer and sale meets some exemption, either an issuer exemption or a secondary resale exemption and that's probably way too complicated to get in this conversation, but just as a general sense, if something is a security, the offer and sale of it needs to be registered or it's an unregistered security. Now whether or not a certain product is a security is a facts and circumstances-based test. Not a very satisfying answer, I know, but as you know, probably if you've followed these ICOs or whatever you wanna call them, the DAOs, each one is different and so you need to look at what is the coin or the token doing? How is it used? What rights and obligations does it give to the token holder? What are the expectations the party's involved? And those are the kinds of things that we've been asking for a long time when various offerings hit our desk and we have to analyze whether it's a security. There are definitions to securities under the exchange act and the Securities and Exchange Act. There's also an investment contract concept so sometimes when it doesn't easily fit into a bucket of equity, bond, or some other security, you need to look at, for example, the Howie test and its prodigy and that test looks at whether or not there's an investment of money in a collective enterprise and there's an expectation of profits derived from the efforts of others. So that's a simplistic view of it because there's many, many cases that analyze the Howie test and that give it nuances and it's been implied in many different situations. I can only say that it is a facts and circumstances-based test so there is no one size fits all answer. Whether or not, and so I would caution people who are using this to really seek advice and do that analysis because you could find yourself running afoul of securities laws if you are indeed offering and selling a security that isn't registered in the United States. That said, your second question, whether or not there will be a product in the future that there needs to be some new category for, I think we just have to wait and see. I think things are evolving, things are changing all the time. There's some interesting articles about there, folks have written what they think about these ICOs and I think the fact that people are engaging in that type of discussion will be helpful for us as regulators and we do pay attention and we are working through issues. So too, that very interesting answer about, thanks for that. So yeah, for us, if there were an MIT coin and there were an ICO of an MIT coin, would that be something that fell under the CFTC and how would we look at something like that? So for us, we have jurisdiction, broadly speaking, over the commodity derivatives market, but generally speaking, not the underlying commodity itself. So if you just bought or sold MIT coins, those would likely fall outside our jurisdiction, but then if there were an MIT coin future or MIT coin swap, that would very likely fall under our jurisdiction. There also are areas where leverage commodity transactions also can fall under our jurisdiction. There's a long body of law around that that actually preceded the development of Bitcoin, but other things that were either trying to engineer themselves to fall inside or outside our jurisdiction. Helpful way to look at it, by the way, I was on a panel last week with a former commissioner of the CFTC talking about distributed ledger technology, and I was explaining how in 2015 and in a certain context, our enforcement division determined that Bitcoin was a commodity for purposes jurisdictionally, and I was starting to explain the breadth of it, and he said, well, really a commodity, you should think of that. Anything that's a noun is a commodity unless it's excluded, removed from the statute. That's pretty broad and simplified, but I thought that was helpful, especially in this gathering. In terms of your other question, will the existing structures, our existing definition and framework prove unable to accommodate some of these new things? I mean, I think that's something that is tested and challenged in any kind of legal structure that's created by people, whether it's the constitution in the US, can it be interpreted or involved? How does that work? I wouldn't fully liken the Commodity Exchange Act to the constitution, but it's proven very resilient and is kind of the nature of the products that have developed. It was sort of, I think, written with kind of agricultural kind of derivatives or commodity derivatives in mind, but it's broadened itself to accommodate financial futures as those developed in other intangible assets and different types of commodity derivatives. So I think as a regulator, we first, I think, look to see within our existing framework, what are the implications for something new that's in application of a technology, as Valerie said. Does it fit under our framework? But then, as I was discussing earlier, we may see as we engage with innovators and see some of the things, they may actually test the boundaries or show areas where they need fine tuning or flexibility or where it actually works just fine. So the subtext seemed to be, you got this. ICOs, you got it, like no problem, right? Okay, good, and MIT coin, I mean, what a way to fund your research. I think you can raise some money off of that. I want in, I want in on the pre-sale. I was wondering about some of the very things that you were talking about earlier that are enabling some of this, the fact that it doesn't have to be a big team of people, that they can use the cloud to scale up and development of a new technology can take place in days as opposed to years. Those same things can also be used to sort of erase geographic boundaries. And so I was wondering if you could talk about some of the challenges of dealing with the international components that come up and particularly how you work or don't work with your peers in other countries. So this question comes up frequently in the FSB. I'll use the example of DLT. I could be living in Switzerland. I could be trying to send something, a security or something to somebody in the United States and that security could be a Japanese bond. If it's done all in an exchange, on the Japanese exchange, we know who controls that transaction. But when I do it on a distributed ledger, who controls that? Is it the home? Is it the eventual recipient? Is it the security? Is it the home of the security? We don't know. So for something like this, there might need to be, to get to Michael's point earlier, there might need to be new rules that we haven't used before. The other thing that the international aspect of it brings is there's so many things that are now much easier. I used to go to my bank to get a loan because it was a brick and mortar and I knew these people and they wanted to see me. But now I can go to an online portal. I could dial up somebody in the UK and then be matched with them. What does that mean? It probably means that there needs to be a lot more international cooperation in the sense of when is it okay to cross the border to do something and when is it not? With a lot of these portals, there's essentially no restriction. Especially if you're willing to accept funding in Bitcoin, I mean there's just about nothing they can do to stop you in some sense. So it's a huge issue. I don't have any answers for you. There's a report that the G20 asked the FSB to write on the regulatory issues being raised by the adoption of Fintech and this cross-border questions is a whole section. It'll be published in July. So you can read some of the thoughts that we have there. That's a short answer, but it's because I don't have answers to it. Valerie, do you think there are any challenges for you in enforcing this? Yeah, I thought you'd get to that. Just say no. I can't do this in the Dow yet. Yeah, I look at the innovations in technology kind of fall on two sides to me because I'm in enforcement, but I'm also on this broader group of the commission that's considering regulatory and policy implications. So I think when we're talking about legitimate uses of, for example, DLT, you're seeing a lot of talking. So we liaison with the Ontario Securities Commission, the folks in the UK, the Australians, we reach out to them, we see what they're doing, we see what's working for them, and there's a lot of great communication and through IOSCO and other international bodies that come together to make sure that we're sharing information and writing reports. But on the other side, there's the nefarious folks who are using, for example, Bitcoin or other digital currencies or virtual currencies to commit crime. And so unfortunately, when I wear my enforcement hat, I have seen that these kinds of crimes are often cross-border. They involve folks that we're not used to dealing with because they could be very much younger than where the victims can be very much younger, the perpetrators can be, there are folks who aren't in the industry that we're not used to kind of seeing, being involved in, for example, a securities fraud. They may be located in a different country, they may be using a server that's in one country, they're located in another and they're targeting victims in the United States. So as long as they're targeting victims in the United States or their fraud is touching upon the United States in some way, then we try to search our addiction to stop that from happening. And then we go through various procedures to reach out to our counterparts parts in different countries to see if they can gather information through memorandum of understanding and other agreements that we have with various countries. So in that regard, it's kind of the same thing. We typically have to seek information or evidence in other countries, but the international nature of some of the virtual currencies presents challenges for us, but it's not challenges that we haven't been able to overcome. We've managed to bring quite a few cases involving fraud, unregistered companies like broker dealers and exchanges who are running virtual currency exchanges online, Ponzi schemes. So we've been able to actually bring these cases and successfully. So I would add also that a number of the markets that we oversee are already global markets and risk moves around the world at lightning speed and when there's an event especially an unexpected market event, kind of the outcome of the Brexit vote, the Swiss unpegging the value of the Swiss frank from the Euro kind of risk and positions they move around the world extremely quickly. And in my previous role, immediately before this commission, I ran the division that oversees several of the world's largest clearing houses and in a derivatives clearing house, it's a little bit different from the way equity markets where you have sort of delivery versus payment and that's kind of taken care of that day or T plus whatever, not to underestimate how important that is, it's quite difficult to supervise. But in a derivatives clearing house, a future typically lasts for months and a swap lasts for many years. And during that period, the derivatives clearing house manages the risk of the members and the customers of the members. And the amount of margin that the clearing house is holding that relates to that risk is measured in the hundreds of billions of dollars, probably two thirds of which is it relates to customers. So we're already kind of used to monitoring risks like that and risks that are not just in our home market but that the clearing houses we see and the customers and users of those are around the world. I think what's kind of looking at something like a distributed ledger, when I first started hearing about ideas kind of two or three years ago of what if distributed ledger blockchain technology could be applied for clearing in derivatives, it was somewhat, there were a number of features that I think were fairly alarming. The notion that you would have an anonymous permissionless ledger that to look at this whole structure of trust and resource and customer protection and that we wouldn't really have oversight of where it was and where the risks were, that was certainly something that was a matter of concern, not to say that if the market evolves that way we couldn't manage to see it but what's been interesting in some of the work that I've been doing with fellow regulators and kind of CPMI and ASCO which is sort of groups of bank regulators and central bankers then groups of market and securities regulators, we've been studying kind of use cases in clearing and settlement, reporting and data management and a number of these areas and actually a number of the use cases thus far have not actually been deployed via an anonymous permissionless ledger. Kind of use cases that we're seeing at least thus far have been primarily permissioned with known participants and trusted so that certainly a little easier for us to wrap our minds around. Many of these use cases actually have a central operator so again it's not like the thing where nobody can fix it if something goes wrong. In a number of cases, the functions that are being performed in the ledger then hook up to other market infrastructure, pipes for bank transfer and so on. So I think these things are still developing. I think that the risks are very serious ones that we would have to really look at how to handle and supervise if they materialize. One last quick question. This is primarily for John. The business model for Silicon Valley has always been an attempt of monopolistic control of a certain industry. Whether it's Google and search, Facebook and social media for example. But the financial services industry, particularly the stability goals of the federal reserve, focused on limiting that monopolistic power such as the real meal act. To what extent is the FSB and the FRB monitoring those financial firms involved in the technology space that are attempting that monopolistic control? Whether it's for example the Chinese government looking at WeChat and how much they control the payment system in China. Whether it's maybe Vanguard increasing their ETI potential technologies, I understand. Vanguard going from one trillion four years ago to five trillion now. How worried are you about someone getting monopolistic control? And what tools and your tool that you have to kind of slow that path down or better guide it? So I'm gonna speak from the FSB's perspective. I think that's where my most value out of here is. I mean, number one, if it's a technology, a financial innovation, they've come up with the only distributed ledger or something like that. I think the way we would capture it is through the industry outreach that we're doing. I think you would pretty quickly learn that this is the only company in this space. I'm not aware of anything in the FinTech area that sort of meets that definition. Even in China where peer-to-peer lending grew very, very rapidly. There was no one company that dominated it. Now maybe Alibaba, Alipay, whatever they're calling all their different financial. I mean, maybe that is getting to that level. So within the FSB, you would have this, the idea of a global SIFI, the Systemically Important Financial Institution. I haven't heard anybody mention the idea of designating somebody like that. I mean, with Ant, you have to ask yourself, is it a bank? I mean, they don't define themselves as a bank, but they're essentially performing all the same services. Maybe there's some legal difference between a bank in China and what Ant is right now, but the Chinese authorities would be responsible there. I guess if somebody raised it at an FSB meeting and said we should discuss whether there's a new Systemically Important Financial Institution, and it doesn't have to be Ant, it could be M-Pace and Kenya, it could be something like that. We do have the concept of a SIFI and how we would regulate something like that. I think potentially some of these smaller countries with things like M-Pace might be more reliant on that new technology, and some of the new technology in India has just taken over. I think that might be creating a point of failure more than maybe Ant or something like that, but I haven't studied those particular institutions, but I think it would be the idea of a SIFI, how you would regulate a SIFI, that sort of thing. I just wanna thank you all for coming up to Cambridge here and the law school and sharing your perspective on all of this. Who knew financial regulation could be so much fun and so exciting, right? So thank you again for your time and for sharing your views, not the views of your agencies. I'll be back sometime. Thank you very much. Thanks, Patrick. Thank you.