- SEC’s Fall 2021 Regulatory Flexibility Agenda
- SEC proposes rule to provide transparency in the securities lending market
- SEC proposes updates to electronic recordkeeping requirements
- SEC proposes rule amendments to proxy rules governing proxy voting advice
- SEC proposes amendments to money market fund rules
- SEC adopts new rules for universal proxy cards in contested director elections
- SEC announces Form CRS observations
- Risk Alert: Advisory fees
- Risk Alert: Observations from examinations of advisers that provide electronic investment advice
- SEC Investor Advisory Committee, December meeting
- SEC staff announces changes to Rule 14a-8 No-Action requests
- SEC appoints Haoxiang Zhu Director of Division of Trading and Markets & William Birdthistle Director of Division of Investment Management
- SEC approves NYSE rule change to amend the shareholder voting requirement
- DOL’s Fall 2021 Regulatory Flexibility Agenda
SEC’S REGULATORY PRIORITIES
SEC’s Fall 2021 Regulatory Flexibility Agenda
The SEC published their Fall 2021 regulatory priorities for the next 12 months. Key items on the short-term agenda include: Tailored shareholder reports/498B (for final rulemaking); amendments to the broker-dealer electronic books and records rules; amendments to Form N-PX (“to enhance the information reported on Form N-PX”); universal proxy (adopted); and rule amendments to move to T+1 settlement. There is a long list of corporate issuer disclosure proposals, including climate changes and human capital management.
Other items on the agenda include: Proxy advisor advice, Rule 14a-8 amendments and updates to the transfer agency rules. Notably, cryptocurrency and digital assets are not on the agenda, and gamification and digital engagement items were moved from the short-term to the long-term agenda.
SEC RULE PROPOSALS
SEC proposes rule to provide transparency in the securities lending market
On November 18, the SEC published proposed Exchange Act Rule 10c-1, which would require lenders of securities to provide the material terms of securities lending transactions to a registered national securities association.
SEC proposes updates to electronic recordkeeping requirements
On November 18, the SEC published proposed amendments to the electronic recordkeeping and prompt production of records requirements applicable to broker-dealers, SBSDs and MSBSPs. Comments are due on January 3.
SEC proposes rule amendments to proxy rules governing proxy voting advice
On November 17, the SEC proposed amendments to its rules governing proxy voting advice. The Commission is proposing to rescind two recently adopted conditions: (1) registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner, and (2) clients of proxy voting advice businesses are provided with a means of becoming aware of any written responses by registrants to proxy voting advice.
SEC proposes changes to money market fund rules
On December 15, the SEC proposed amendments to their money market fund rules in response to the March 2020 economic response to the COVID-19 pandemic. The amendments are focused on prime and tax-exempt money market funds highlighted by these events.
SEC adopts new rules for universal proxy cards in contested director elections
On November 17, the SEC voted to adopt final rules requiring parties in a contested election to use universal proxy cards that include all director nominees presented for election at a shareholder meeting, giving shareholders the ability to vote by proxy for their preferred combination of board candidates.
SEC statement regarding Form CRS disclosures
On December 17, the SEC published a statement regarding Form CRS disclosures. “Accordingly, to further the goals of the relationship summary, and to assist firms as they consider ways to improve their relationship summaries, we describe below some of the Committee’s observations – first, with respect to the specific disclosure topics required by the form’s instructions, and second, with respect to the general requirements pertaining to content, format, and website posting. Firms may wish to review their relationship summaries, especially in light of the observations identified below, and confirm they address each item consistent with the form’s instructions.”
Risk Alert: Advisory fees
On November 10, the Division of Examinations Observations published a Risk Alert regarding investment advisers’ fee calculations.
Risk Alert: Observations from examinations of advisers that provide electronic investment advice
On November 9, the Division of Examinations Observations published a Risk Alert regarding observations from examinations of advisers that provide electronic investment advice.
SEC Investor Advisory Committee – December Meeting
At the SEC’s December meeting, the IAC approved recommendations of the Investor as Purchaser Subcommittee regarding Individual Retirement Accounts.
SEC Staff announces changes to staff responses to Rule 14a-8 no-action requests
On December 13, the SEC’s Division of Corporation Finance announced that it will return to its prior practice of responding to each shareholder proposal no-action request with a written letter. Response letters will be posted publicly on the Division’s website “in a timely manner… [and] expect to publish a chart upon completion of the proxy season.”
SEC appoints Haoxiang Zhu Director of Division of Trading and Markets
On November 19, the SEC announced the appointment of Haoxiang Zu, Billard Professor of Management and Finance and Associate Professor of Finance at the MIT Sloan School of Management, as Director of Division of Trading and Markets.
SEC Appoints William Birdthistle Director of the Division of Investment Management
On December 21, the SEC announced the appointment of William A. Birdthistle, currently a professor at Chicago-Kent College of Law, as Director of the Division of Investment Management.
SEC approves NYSE rule change to amend the shareholder voting requirement
On November 19, the SEC approved the NYSE rule change to amend the shareholder voting requirement in section 312.07 of the NYSE Listed Company Manual. Under the change, matters that require shareholder approval subject to the minimum vote required must calculate the votes cast in accordance with its own governing documents and any applicable state law.
DEPARTMENT OF LABOR
DOL’s Fall 2021 Regulatory Flexibility Agenda
The DOL published their Fall 2021 regulatory priorities for the next 12 months. Key items on the DOL/EBSA’s short-term agenda include: Improving participant engagement and effectiveness of ERISA retirement plan disclosures; definition of the term "fiduciary"; prudence and loyalty in selecting plan investments and exercising shareholder rights; and pension benefit statements-lifetime income illustrations.