HomeFinance NewsFinanceSEC Chief Drops Bombshell: Get Ready for the Great Disclosure Divide

SEC Chief Drops Bombshell: Get Ready for the Great Disclosure Divide


SEC Chair Gary Gensler signals that disclosure will be a key issue in the year ahead


The SEC’s annual “SEC Speaks” event is a platform where the Securities and Exchange Commission (SEC) outlines its priorities for the coming year and provides guidance to legal professionals.

On the first day of the conference, SEC Chair Gary Gensler announced a focus on “disclosure.”

This encompasses several initiatives: **Settlement Cycle:** Shortening the time for security transactions to settle from two days to one (T+1).

**Expanding the Definition of “Exchange”:** Including more electronic trading platforms to ensure they comply with disclosure requirements.

**Sub-Penny Increment Trading:** Considering adopting a system that allows trades at sub-penny increments instead of the current one-penny increment, providing more precision in pricing.

**Best Execution Standard:** Establishing a standard that requires broker-dealers to prioritize executing trades at the best available price for investors.

**Payment for Order Flow:** Promoting competition in order execution by reducing the practice of paying broker-dealers for directing orders to specific platforms.

**Protecting Investors, Maintaining Fair Markets, and Facilitating Capital Formation:** The SEC emphasizes its mandate of protecting investors, ensuring fair and efficient markets, and supporting capital formation.

**History and Role of the SEC:** Following the stock market crash of 1929, Congress passed laws requiring disclosure of all relevant information about securities, leading to the creation of the SEC in 1934.

**SEC Divisions and Functions:** The SEC’s work encompasses: * **Risk Monitoring:** Analyzing and identifying potential risks to investors.

* **Disclosure:** Ensuring that corporations provide clear and accurate disclosures about their operations and finances.

* **Enforcement:** Investigating and prosecuting violations of securities laws.

* **Mutual Funds and Investment Advisers:** Overseeing the industry and enforcing compliance with regulations.

* **Trading:** Monitoring trading activities and ensuring compliance with regulations.

**Enforcement:** The SEC’s Division of Enforcement plays a vital role in investigating and prosecuting violations of securities laws.

**SPAC Regulations:** The conference is likely to address the recent tightening of rules around special purpose acquisition companies (SPACs), emphasizing the importance of accurate disclosure in this area.

  • Overall sentiment: positive
  • Positive

    “Disclosure is at the heart of the whole game.”


    “Prior to 1933, and particularly in the 1920s, all sorts of securities were sold to the public with wild claims behind them, much of which were fraudulent.”

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