The Office of Information and Regulatory Affairs identified the SEC's short- and long-term regulatory priorities in its Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions.

The SEC will focus on the following areas:

  • environmental, social and governance ("ESG") related disclosures, including those concerning climate risk, workforce and corporate board diversity, and cybersecurity risk;
  • the market structure of equity, treasury and other fixed-income markets;
  • the transparency of stock buybacks, short-sale disclosure, ownership of securities-based swaps ("SBS") and the stock loan market;
  • investment fund rules, including those concerning money market, private and ESG funds;
  • affirmative defense provisions under SEA Rule 10b5-1 ("Trading 'on the Basis of' Material Nonpublic Information in Insider Trading Cases");
  • pending action directed by Dodd-Frank, including SBS-related rules, compensation arrangements based on incentive and conflicts of interest in securitizations;
  • the improvement of shareholder democracy;
  • special-purpose acquisition companies ("SPACs"); and
  • required electronic filings and transfer agents.

In a joint statement, SEC Commissioners Hester Peirce and Elad Roisman expressed regret that the agency seeks to revisit recent regulatory actions while leaving out other significant rulemakings, including those that would (i) clarify the regulatory treatment of digital assets, (ii) enable companies to provide gig workers with equity compensation and (iii) "revisit proxy plumbing." The Commissioners emphasized that some of the rules SEC Chair Gary Gensler is looking to revisit, including updates to rules concerning proxy voting advice and the "accredited investor" definition, have been in effect for less than a year, asking what warrants their reconsideration. While the Commissioners acknowledged that changes in administration are typically followed by changes in policy, "reopening large swathes of work that was just completed without new evidence to warrant reopening is not normal practice."

Commentary Steven Lofchie

The SEC's priorities reflect a mix of (i) political initiatives that are important to the Biden administration (i.e., ESG); (ii) responses to recent market events (including market structure and payment for order flow, securities-based swap ownership and SPACs); (iii) systemic risk issues (i.e., money market funds); and (iv) market mechanics issues (i.e., finishing up the swaps rules and transfer agents).

This is the third joint statement by Republican Commissioners Peirce and Roisman criticizing actions of the Chair or the Democratic majority that are perceived to be out of the ordinary or particularly partisan.

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