The draft strategic plan establishes three primary goals:
- Protecting working families against fraud, manipulation, and misconduct;
- Developing and implement a robust regulatory framework that keeps pace with evolving markets, business models, and technologies; and
- Supporting a skilled workforce that is diverse, equitable, inclusive, and is fully equipped to advance agency objectives.
The SEC intends to enhance the use of market and industry data to prevent, detect, and prosecute improper behavior.
The SEC also seeks to modernize design, delivery, and content of disclosures to investors.
The agency aims to update existing SEC rules and approaches to reflect evolving technologies, business models, and capital markets.
Other notes from the draft:
It is often said to “treat like cases alike.” The same is true of the financial sector. All financial activities should be subject to consistent and efficient regulation and enforcement, regardless of the entity, the technology, or the business model. The SEC will continue to look at the economic realities of a given product or arrangement to determine whether it complies with the securities laws.
The SEC will continue to pursue misconduct wherever its staff find it and will use all of the tools in its toolkit to deter those who might choose to violate the securities laws, including by holding bad actors—including responsible individuals— accountable. The SEC will also continue to work in parallel with its fellow federal agencies, law enforcement authorities, international regulators, and self-regulatory organizations. The SEC’s examinations program will continue to focus on uncovering key risks and violations that could impact individual investors, from cybersecurity to private fund adviser conflicts of interest.
To better prevent, detect, and enforce against improper behavior, the SEC should continue to develop and implement faster and more comprehensive methods to allow the Divisions of Enforcement and Examinations to leverage data. The SEC must also continue to employ timely, cutting-edge data analysis that helps accomplish its regulatory mission; provide well-structured, material data to investors; and manage data as a strategic asset.
The markets have begun to embrace the necessity of providing a greater level of disclosure to investors. From time to time, the SEC must update its disclosure framework to reflect investor demand. Today, investors increasingly seek information related to, among other things, issuers’ climate risks, cybersecurity hygiene policies, and their most important asset: their people. In order to catch up to that reality, the agency should continue to update the disclosure framework to address these areas of investor demand, as well as continue to take concrete steps to modernize the systems that support the disclosure framework, to make public disclosures easier to access and analyze and thus more decision-useful to investors.
The SEC must enhance transparency in private markets and modify rules to ensure that core regulatory principles apply in all appropriate contexts. To maintain the integrity of the markets, the SEC needs to develop specific regulations to ensure investors remain informed and protected via a broad-based disclosure frameworks.
Future market volatility driven by market or external events such as the pandemic, the evolution of markets without subsequent strengthening of agency authorities, and the rapid growth in crypto assets all represent evolutionary risks. To be better prepared for, and more agile in, its response to such risks in the future, the SEC must pursue new authorities from Congress where needed, continue to effectively collaborate with other regulators, and engage more proactively on digitization initiatives.
Enhance the agency’s internal control and risk management capabilities, including by the development of a robust and resilient program for dealing with threats to the security, integrity, and availability of the SEC’s systems and sensitive data
Comments can be submitted here: https://www.sec.gov/cgi-bin/ruling-comments