The SEC Speaks event, sponsored by the Practicing Law Institute, provides insights into the Securities and Exchange Commission’s priorities for the upcoming year. SEC Chair Gary Gensler emphasized the importance of updating regulations to promote trust, efficiency, competition, and liquidity in the markets. Key topics discussed at the event include shortening the securities settlement cycle, expanding the definition of an exchange, changing quoting stock trade increments, establishing a best execution standard for broker-dealers, and increasing competition for individual investors’ orders.
The SEC’s mission centers around protecting investors, maintaining fair and efficient markets, and facilitating capital formation. This mandate stems from the aftermath of the 1929 stock market crash, which led to the creation of the SEC to enforce new laws aimed at preventing fraudulent securities practices. The agency’s focus on disclosure underpins its efforts to ensure that companies provide relevant information that could impact investors.
The event provides an opportunity for Gensler and SEC staff to elaborate on the agency’s initiatives. The SEC’s six divisions concentrate on risk monitoring, disclosure, and enforcement. The economic and risk analysis division assesses potential risks to investors, while the corporation finance division oversees disclosures made by public companies. The division of examinations conducts the SEC’s National Exam Program to ensure compliance with disclosure requirements, particularly on topics such as climate change, crypto, and cybersecurity.
The division of enforcement serves as the investigative and prosecutorial arm of the SEC, pursuing civil suits against companies not in compliance with securities laws. Another critical division focuses on monitoring mutual funds, ETFs, and investment advisers, in line with the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Discussion topics may include new disclosure requirements for advisers to private funds.
The division of trading and markets oversees entities involved in trading activities, such as broker-dealers, stock exchanges, and clearing agencies. Updates on record-keeping requirements, trading cycle shortening, and short sale disclosure may be on the agenda. Additionally, recent SEC rule changes have tightened disclosure regulations for special purpose acquisition companies (SPACs), making target companies legally liable for forward-looking statements about future results, similar to traditional IPO disclosures.
While President Trump may not be a focus at the conference, recent regulatory changes have impacted SPAC disclosures. The message of “Disclosure!” is likely to be a prominent theme at the event, reinforcing the SEC’s commitment to transparency and investor protection. Overall, the SEC Speaks event serves as a platform for the SEC to communicate its regulatory priorities and initiatives, providing valuable insights for the legal community and market participants.
