SEC Chair Jay Clayton reviewed progress on the agency's regulatory and policy initiatives.
In testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Mr. Clayton discussed the SEC Strategic Plan for 2018-2022. He described the goals of the plan as (i) focusing on the interests of long-term Main Street investors, (ii) being innovative and responsive to the changing nature of the markets, and (iii) elevating the agency's performance through technology, data analytics and human capital. In reviewing progress made over the past year, Mr. Clayton:
- lauded the SEC's proposed Regulation Best Interest, saying that the rulemaking package would improve broker-dealer standards of conduct by creating an obligation that mandates broker-dealers to act in the best interests of the retail customer;
- reported that the SEC took significant steps in 2018 to encourage capital formation for emerging companies (e.g., the SEC adopted amendments in June 2018 to the "smaller reporting company" definition to expand the number of qualifying companies for scaled disclosure requirements);
- said there is growing agreement that the current dynamics among proxy advisory firms, investment advisers who use such firms, issuers and investors can be improved;
- discussed the implementation of the Consolidated Audit Trail (CAT);
- voiced optimism that developments in distributed ledger technology can help with capital formation; and
- anticipated that the SEC will continue with its efforts to come up with a "coherent package of rules" to finalize its statutory security-based rulemaking obligations, and other Dodd-Frank rulemakings, including those related to executive compensation.
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