On June 19, 2018, the Securities and Exchange Commission (the “SEC") published a draft strategic plan outlining the SEC’s priorities through 2022 (the “Plan Draft"). As previously reported, the Plan Draft comprised three broad goals: focusing on retail investors, increasing innovation, and strengthening performance.
After seeking public comment on the Plan Draft until July 25, 2018, the SEC ultimately published the final strategic plan (the “Final Plan") on October 11, 2018. The Final Plan is an exact replica of the Plan Draft, save for the redaction of four names from Chairman Jay Clayton’s “Message from the Chairman" in lieu of a general thank you to his fellow Commissioners. The change was likely precipitated by the departure of Commissioner Michael Piwowar in July and the subsequent appointment of Commissioner Elad Roisman to the SEC in September. While the Plan Draft also included a statement that the Commissioners hoped to “gain the benefit of additional outside perspectives" through the public review and comment process, the SEC ultimately stuck to its guns and adopted the Plan Draft in its entirety.
The Final Plan’s first broad goal is to focus on the long-term interests of “Main Street" investors through five initiatives. First, the SEC intends to educate itself on the breadth of investment participation so as to better tailor its resources to the reality of modern capital markets. Armed with this knowledge, the SEC’s subsequent mission is to enhance outreach and education in a way that reflects the diversity of modern investors and businesses. Additionally, the SEC plans to expand efforts in enforcement and deterrence of securities manipulation, fraud, and abuse, while also modernizing EDGAR and information delivery to make it easier for investors to acquire, and filers to disseminate, key information. Lastly, the SEC hopes to increase investment opportunities by expanding the amount of SEC-registered and exchange-listed companies in play.
The second goal for the SEC in the coming years is to stay abreast of technological innovation, particularly with an eye toward globalization. By continually learning and adapting, the SEC aims to make sure it remains an effective regulator. Moreover, the SEC intends to be self-reflective and self-critical when it comes to its current rules and procedures with the help of public feedback. While addressing the increase in cybersecurity risks for market participants, the SEC aspires to be prepared for any market emergency.
The last goal of the Final Plan is to elevate the SEC’s own performance. This is to be accomplished by promoting diversity, inclusion, and equality among the agency’s staff; leveraging data analytics, risk analytics, and data management; and actively investing in tools that uncover violations of securities laws. The SEC plans to establish a new Chief Risk Officer position to promote its cybersecurity efforts, but also seeks to more efficiently promote collaboration and information sharing across current agency staff.
The SEC’s strategic plan was developed through discussions with congressional committees and members of Congress, investors, businesses, academics, and experts, and through the use of meetings, formal outreach programs, Commission-sponsored roundtables, conferences, and broad solicitation. While the goals are both laudable and lofty, they do not represent a dramatic departure from its past mission statements. Each Chairman adds his or her own focus. The last Chair, Mary Jo White, a former prosecutor, seemed more focused on the enforcement program, with an eye to policing minor technical violations of the law (referred to as "broken windows"). Chairman Clayton seems more focused on protection of the capital markets, technology and enforcement actions against those who prey on retail investors.
Special appreciation to associate Monika Kluziak for her work on this briefing.