In testimony before the Senate Committee on Banking, Housing and Urban Affairs, SEC Chair Jay Clayton described progress on the agency's FY 2019 initiatives. Committee Chair Mike Crapo (R-ID) also provided several regulatory recommendations to the SEC.

In his testimony, Mr. Clayton identified key areas of focus outlined in the SEC Strategic Plan for 2018-2022 (see previous coverage), including:

  • educating investors, and listening to the challenges investors face, through direct engagement with market participants;
  • monitoring the market environment to modernize regulations, in addition to adopting a "forward-thinking" approach concerning data and technology;
  • increasing "technology, data analytics and human capital" to improve agency performance, including by filling empty positions; and
  • strengthening the SEC's cybersecurity risk profile.

Mr. Clayton highlighted FY 2019 successes including:

  • advancing 34 of the 39 rulemakings listed in the agency's fiscal year near-term agenda;
  • bringing a total of 862 enforcement actions and ordering $4.3 billion in disgorgement and penalties, in addition to returning $1.2 billion to investors;
  • working to advance the Retail Strategy Task Force (or "RSTF") to defend teachers, service members and seniors against fraud;
  • encouraging informed investments through the establishment of robust investor education programs; and
  • creating the position of Senior Policy Advisor for Market and Activities-Based Risk to address market risks.

Senator Crapo commended the SEC for these developments and encouraged the SEC to, among other things:

  • move forward on the proposal to modify the accelerated filer definition in order to provide relief to smaller reporting companies;
  • revise Regulation D to (i) allow for general solicitation, (ii) expand the ability of small businesses to crowdfund, (iii) modify the definition of accredited investor to account for expertise, and (iv) update the definition of family office; and
  • consider alternative approaches for the Consolidated Audit Trail in a way that protects personally identifiable information.

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