In June of 2022, the SEC released their Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions – a list of more than 50 proposed regulation updates, both proposed and finalized.
With such a lengthy list, industry professionals would be wise to begin their appraisal of the rules as early as possible. Many of the rules are in their final stages of review, leading some to wonder if we’ll see official enactments by the end of the calendar year. For example, the Climate Rule’s adoption is expected as early as October.
While the exact schedule may shift, the list gives advisors a general guideline of when to expect certain regulatory updates, allowing them to plan ahead. To keep your firm up-to-date, see the full list of final rules below.
Final Rules
Listed here is a complete list of all rules finalized in the SEC’s 2022 Spring Regulatory Agenda.
The information listed below is taken directly from the Office of Information and Regulatory Affairs’ Office of Management and Budget. Click here to find more information on each rule.
Listing standards for recovery of erroneously awarded compensation
The Division is considering recommending that the Commission adopt rules to implement section 954 of the Dodd Frank Act, which requires the Commission to adopt rules to direct national securities exchanges to prohibit the listing of securities of issuers that have not developed and implemented a policy providing for disclosure of the issuer’s policy on incentive-based compensation and mandating the clawback of such compensation in certain circumstances.
Pay versus performance
The Division is considering recommending that the Commission adopt rules to implement section 953(a) of the Dodd-Frank Act, which added section 14(i) to the Exchange Act to require issuers to disclose information that shows the relationship between executive compensation actually paid and the financial performance of the issuer.
Mandated electronic filings
The Division is considering recommending that the Commission adopt amendments to Regulation S-T that would update the mandated electronic submissions requirements to include additional filings. These additional filings would include: Form 144, Form 11-K and Form 6-K.
Rule 10b5-1 and insider trading
The Division is considering recommending that the Commission adopt amendments to address concerns about the use of the affirmative defense provisions of Exchange Act Rule 10b5-1.
The Commission proposed amendments that would add new conditions to the availability of an affirmative defense under an Exchange Act rule that are designed to address concerns about abuse of the rule to opportunistically trade securities on the basis of material nonpublic information in ways that harm investors and undermine the integrity of the securities markets.
Climate change disclosure
The Division is considering recommending that the Commission adopt rule amendments to enhance registrant disclosures regarding issuers’ climate-related risks and opportunities.
Cybersecurity risk governance
The Division is considering recommending that the Commission adopt rule amendments to better inform investors about a registrant’s cybersecurity risk management, strategy and governance, and to provide timely notification of material cybersecurity incidents.
The Commission proposed rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and cybersecurity incident reporting by public companies that are subject to the reporting requirements of the Exchange Act.
Proxy voting advice
The Division is considering recommending that the Commission adopt rule amendments governing proxy voting advice. The proposed amendments would remove conditions to the availability of certain exemptions from the information and filing requirements of the Federal proxy rules for proxy voting advice businesses.
In addition, the proposed amendments would amend the proxy rules’ antifraud provision to remove examples of situations in which the failure to disclose certain information in proxy voting advice may be considered misleading within the meaning of the Federal proxy rules’ prohibition on material misstatements or omissions. Finally, the release provides the Commission’s view regarding the application of that prohibition to proxy voting advice, in particular with respect to statements of opinion.
Modernization of beneficial ownership reporting
The Division is considering recommending that the Commission adopt rule amendments to modernize the beneficial ownership reporting obligations. The Commission proposed amendments that would accelerate the filing deadlines for initial and amended beneficial ownership reports filed on Schedules 13D and 13G.
The proposed amendments also would deem holders of certain cash-settled derivative securities as beneficial owners of the reference equity securities and clarify the disclosure requirements of Schedule 13D with respect to derivative securities.
In addition, the proposed amendments would clarify and affirm the operation of the beneficial ownership reporting rules as applied to two or more persons that form a group under the Securities Exchange Act of 1934, and provide new exemptions to permit such persons to communicate with each other, jointly engage issuers, and execute certain transactions without being subject to regulation as a group.
Share repurchase disclosure modernization
The Division is considering recommending that the Commission adopt amendments to modernize and improve disclosure about issuers’ repurchases of their equity securities that are registered under the Securities Exchange Act of 1934.
The Commission proposed amendments that would require an issuer to provide more timely disclosure on new Form SR regarding purchases of its equity securities for each day that it, or an affiliated purchaser, makes a share repurchase. The proposed amendments would also enhance the existing periodic disclosure requirements about these purchases specified in Item 703 of Regulation S-K.
Enhanced reporting of proxy votes by registered management investment companies: Reporting on executive compensation votes by institutional investment managers
The Division is considering recommending that the Commission adopt rule amendments to implement section 951 of the Dodd-Frank Act and to enhance the information reported on Form N-PX.
The Commission previously proposed amendments to rules and Form N-PX that would require institutional investment managers subject to section 13(f) of the Exchange Act to report how they voted on any shareholder vote on executive compensation or golden parachutes pursuant to sections 14A(a) and (b) of the Exchange Act.
Tailored shareholder reports, treatment of annual prospectus updates for existing investors and improved fee and risk disclosure for mutual funds and ETFs: Fee information in investment company ads
The Division is considering recommending that the Commission adopt a new streamlined shareholder report under the Investment Company Act of 1940. The Division is also considering recommending that the Commission adopt rule and form amendments to improve and modernize certain aspects of the current disclosure framework under the Investment Company Act.
Amendments to Form PF to require current reporting and amend reporting requirements for large private equity advisers and large liquidity fund advisers
The Division is considering recommending that the Commission adopt amendments to Form PF to require current reporting upon the occurrence of key events; decrease the reporting threshold for large private equity advisers and require the reporting of certain additional information; and amend requirements concerning how large liquidity advisers report information about the liquidity of funds that they advise.
Money market fund reforms
The Division is considering recommending that the Commission adopt reforms relating to the regulation of money market funds. The Commission proposed to remove the liquidity fee and redemption gate provisions in the existing rule, and to require certain money market funds to implement swing pricing policies and procedures.
The Commission also proposed to increase minimum liquidity requirements for money market funds, as well as reporting and disclosure amendments. In addition, the Commission proposed rule amendments to address how money market funds with stable net asset values should handle a negative interest rate environment.
Electronic submission of applications for orders under the Advisers Act, confidential treatment requests for filings on Form 13F and ADV-NR
The Division is considering recommending that the Commission adopt amendments to rules and forms to require that the following types of filings be submitted electronically: (1) applications for orders under any section of the Investment Advisers Act of 1940, (2) confidential treatment requests for filings made under section 13(f) of the Securities Exchange Act of 1934, and (3) ADV-NR.
Private fund advisers: documentation of registered investment adviser compliance reviews
The Division is considering recommending that the Commission adopt rules under the Advisers Act to address lack of transparency, conflicts of interest, and certain other matters involving private fund advisers.
Cybersecurity risk governance
The Division is considering recommending that the Commission adopt rules to enhance fund and investment adviser disclosures and governance relating to cybersecurity risks.
Prohibition against fraud, manipulation and deception in connection with security-based swaps; prohibition against undue influence over chief compliance officers and disclosure of SBS positions
The Division is considering recommending that the Commission adopt rules to prevent fraud, manipulation, and deception in connection with security-based swaps in accordance with section 9(j) of the Exchange Act, rules to prohibit undue influence over Chief Compliance Officers of security-based swap dealers and major security-based swap participants, as well as adopt rules under section 10B of the Exchange Act to require certain disclosures in connection with security-based swap positions.
Removal of references to credit ratings from Regulation M
Section 939A of the Dodd Frank Act requires the Commission to remove certain references to credit ratings from its regulations and to substitute such standards of creditworthiness as the Commission determines to be appropriate.
The Division is considering recommending that the Commission adopt proposed amendments to eliminate the exceptions for investment grade non-convertible debt, non-convertible preferred, and asset-backed securities (as rated by at least one Nationally Recognized Statistical Rating Organization) from Rules 101 and 102 of Regulation M and replace the exception in Rule 101 with alternative standards – one based on distance to default using a Structural Credit Risk Model for non-convertible debt and non-convertible preferred debt, and one based on SF-3 shelf registration for asset-backed securities.
Short sale disclosure reforms
The Division is considering recommending that the Commission adopt proposed rules to implement section 929X(a) of the Dodd-Frank Act.
Amendments to exchange Act Rule 3b-16 re definition of “exchange”; Regulation ATS and Regulation SCI for ATSs that trade U.S. government securities, NMS stocks and other securities
The Division is considering recommending that the Commission adopt proposed amendments to Exchange Act Rule 3b-16 to include systems that offer the use of non-firm trading interest and communication protocols to bring together buyers and sellers of securities.
The Division is considering recommending that the Commission adopt proposed amendments to Regulation ATS and Regulation SCI for ATSs that trade U.S. Government Securities, NMS stock, and other types of securities and to require the electronic filing of a modernized version of Form ATS and Form ATS-R.
Amendments to NMS plan for the consolidated audit trail-data security
The Division is considering recommending that the Commission adopt amendments to the National Market System Plan Governing the Consolidated Audit Trail regarding data security.
Electronic recordkeeping requirements for broker-dealers and security-based swap dealers and major security-based swap participants
The Division is considering recommending that the Commission adopt amendments to the electronic recordkeeping requirements for broker-dealers, security-based swap dealers, and major security-based swap participants.
Loan or borrowing of securities
The Division is considering recommending that the Commission adopt rules to further implement section 984(b) of the Dodd-Frank Act. Section 984 of the Dodd-Frank Act provides the Commission with the authority to increase transparency, among other things, with respect to the loan or borrowing of securities.
It also mandates that the Commission promulgate rules designed to increase the transparency of information available to brokers, dealers, and investors. The Commission proposed a rule to increase the transparency and efficiency of the securities lending market by requiring any person that loans a security on behalf of itself or another person to report the material terms of those securities lending transactions and related information regarding the securities the person has on loan and available to loan to a registered national securities association (“RNSA”).
The proposed rule would also require that the RNSA make available to the public certain information concerning each transaction and aggregate information on securities on loan and available to loan.
Amendments to securities transaction settlement cycle
The Division is considering recommending that the Commission adopt rules to amend Exchange Act Rule 15c6-1(a) to shorten the standard settlement cycle.
Further definition of dealers
The Division is considering recommending that the Commission adopt amendments to address the definition of dealer.
Amendments to the commission’s whistleblower program rules
The Office of the Whistleblower is considering recommending that the Commission adopt additional amendments to the rules governing the Whistleblower Program established by section 922 of the Dodd-Frank Act.
The Commission proposed to amend Rule 21F-3(b)(3) to revise the scope of potential related actions (i.e., the non-Commission actions) that could be covered by the SEC’s whistleblower program in situations where another award program might also apply to that same action.
The Commission also proposed a new paragraph (d) to Rule 21F-6, which would affirm the Commission’s statutory authority to consider the dollar amount of a potential award when determining the award amount, but clarifies that the Commission may exercise its discretion to use that authority for the limited purpose of increasing the award amount and may not use it for the purpose of decreasing an award (either when applying the award factors under Rule 21F-6(b) or otherwise). Finally, the Commission proposed certain conforming and technical amendments.
With these new proposed and finalized rules, you can update your firm’s policies and procedures, keeping your firm apprised of all regulatory and compliance requirements.
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