SEC Chairman outlines regulatory agenda for 2019

Category: SEC, Securities and Exchange Commission

SEC Chairman outlines regulatory agenda for 2019


In a speech in New York earlier this month, Securities and Exchange Commission Jay Clayton reflected on the SEC’s rulemaking efforts in 2018 and discussing the rulemaking agenda for 2019.

Among the many significant initiatives for 2019, some highlights include:

  • ATS Rules Amendments: “[W]e know that transparency is a bedrock of healthy and vibrant markets. I am pleased to report that we have also taken significant steps to make our markets more transparent. For example, in July, we adopted amendments that enhance the transparency requirements governing alternative trading systems, commonly known as ATSs."
  • Proxy Process Plumbing: “There was consensus among the panelists that the proxy “plumbing” needs a major overhaul. I encourage market participants to explore what such an overhaul would entail and to consider how technology, including distributed ledger technology, could improve the proxy plumbing."
  • Shareholder Proposal Thresholds: “[W]e should consider reviewing the ownership and resubmission thresholds for shareholder proposals. The current $2,000 ownership threshold was adopted 20 years ago, and the resubmission thresholds have been in place since 1954. A lot has changed since then.”
  • Proxy Advisory Firms: “For proxy advisory firms, I believe there is growing agreement that some changes are warranted. For example, there should be greater clarity regarding the division of labor, responsibility and authority between proxy advisors and the investment advisers they serve. We also need clarity regarding the analytical and decision-making processes advisers employ, including the extent to which those analytics are company- or industry-specific.”
  • Public Company Capital Formation: “[T]he so-called JOBS Act 3.0 includes provisions to expand testing-the-waters and study our quarterly reporting regime. Both of these initiatives are included on the agenda for 2019 rulemaking — in addition to other Congressionally-directed rulemakings relating to expanding Regulation A for public reporting companies.”
  • Brexit: “The potential adverse effects of Brexit are not well understood and, in the areas where they are understood, are underestimated.”
  • LIBOR: “The Alternative Reference Rate Committee — a committee convened by the Federal Reserve that includes major market participants, and on which the SEC staff and other regulators participate — has proposed an alternative rate to replace U.S. Dollar LIBOR — the Secured Overnight Financing Rate, or SOFR."
  • Cybersecurity: “Cybersecurity is something that we at the agency look at from a number of perspectives … we continue to prioritize cybersecurity in our examinations of market participants, including broker-dealers, investment advisers and critical market infrastructure utilities."

Two very helpful appendices setting forth the SEC’s progress on its 2017 and 2018 rulemaking agendas were included along with the online version of Chairman Clayton’s speech.

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