Publications

(Article from Registered Funds Regulatory Update, July 2022)

For more information, please visit the Registered Funds Resource Center.

On June 22, 2022, the SEC’s Office of Information and Regulatory Affairs released the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions that includes the Division of Investment Management’s anticipated short- and long-term regulatory actions. According to the SEC, the proposed Agenda seeks to (i) continue to drive efficiency in the capital markets; and (ii) modernize rules for today’s economy and technologies. The Agenda includes:

• rule amendments to enhance registrant disclosure of board and nominee diversity;
• rule amendments pertaining to shareholder proposals under Rule 14a-8 under the Exchange Act;
• rule amendments and/or proposed new rules under the Advisers Act to improve and modernize the regulations around the custody of assets;
• new streamlined shareholder reporting under the Investment Company Act and adoption of rule and form amendments to improve and modernize certain aspects of the current disclosure framework under the Investment Company Act;
• proposed rules to implement Section 953(a) of the Dodd-Frank Act, which added section 14(i) to the Exchange Act requiring issuers to disclose information setting forth the relationship between executive compensation paid and the financial performance of the issuer;
• rule amendments to address concerns around the use of the affirmative defense provisions of Exchange Act Rule 10b5-1 that would add new conditions designed to address abuse of the rule to opportunistically trade securities on the basis of material nonpublic information in ways that harm investors and undermine the integrity of the securities markets; and
• changes to regulatory requirements relating to registered investment companies’ fees and fee disclosure.

Following the release of the Request for Comment, SEC Commissioner Hester Peirce issued a statement criticizing the Agenda for failing to “include any items intended to facilitate capital formation.” Peirce stated that the Agenda contradicts what she sees as the agency’s policy missions: (i) to disclose economically material information; (ii) protect retail investors; (iii) help small and emerging companies raise funds; and (iv) increase the number of public companies. She noted, “[we] can avoid creating regulatory rip currents by recalibrating our agenda to focus on issues core to the protection of investors and operation of our markets and by slowing down the pace to ensure that we and the public can think about what we are doing.”

SEC Press Release, SEC Announces Spring 2022 Regulatory Agenda (June 22, 2022), available at: https://www.sec.gov/news/press-release/2022-112.

Hester M. Peirce, SEC Commissioner, Statement, Rip Current Rulemakings: Statement on the Regulatory Flexibility Agenda (June 22, 2022), available at: https://www.sec.gov/news/statement/peirce-statement-regulatory-flexibility-agenda-062222.