TheCorporateCounsel.net

Last week, the SEC announced its Strategic Plan for fiscal years 2022 – 2026. As Dave previewed in August when the draft plan was issued, the 16-page Strategic Plan focuses on three goals to advance the SEC’s mission:

1. Protect the investing public against fraud, manipulation, and misconduct;

2. Develop and implement a robust regulatory framework that keeps pace with evolving markets, business models, and technologies; and

3. Support a skilled workforce that is diverse, equitable, and inclusive and is fully equipped to advance agency objectives.

When it comes to protecting investors, the Strategic Plan says that the SEC will do this through rulemaking as well as enforcement & examination. It also articulates this goal:

Modernize design, delivery, and content of disclosures so investors, including in particular retail investors, can access consistent, comparable, and material information to make informed investment decisions.

The markets have begun to embrace the necessity of providing a greater level of disclosure to investors. From time to time, the SEC must update its disclosure framework to reflect investor demand. Today, investors increasingly seek information related to, among other things, issuers’ climate risks, cybersecurity hygiene policies, and their most important asset: their people. In order to catch up to that reality, the agency should continue to update the disclosure framework to address these areas of investor demand, as well as continue to take concrete steps to modernize the systems that support the disclosure framework, to make public disclosures easier to access and analyze and thus more decision-useful to investors.

Goal #2 – the regulatory framework – includes this sub-goal:

Update existing SEC rules and approaches to reflect evolving technologies, business models, and capital markets.

The ongoing movement of assets into private or unregulated markets, the continual creation of new financial instruments and technologies, and the challenges of increased globalization all require the agency to rapidly update and evolve.

To do so, the SEC must enhance transparency in private markets and modify rules to ensure that core regulatory principles apply in all appropriate contexts. To maintain the integrity of the markets, the SEC needs to develop specific regulations to ensure investors remain informed and protected via a broad-based disclosure frameworks.

The agency must also continue to focus on supervising global entities appropriately. Inherent in the interplay with international markets is the challenge of protecting sensitive information when coordinating with other regulators. Consistent data protection policies are essential for this effort.

Throughout the Strategic Plan, there’s an emphasis on using technology & data, and the SEC’s evolution to meet new market issues. Here’s the 4-year Strategic Plan published by former SEC Chair Jay Clayton in 2018, which shared a few similar themes.

– Liz Dunshee