SEC unveils Spring regulatory agenda

June 18, 2021

The regulator’s short-term plans reflect its legislative ambitions since entering office

The Securities and Exchange Commission (SEC) has filed its Spring 2021 regulatory agenda, outlining short- and long-term regulatory actions that administrative agencies plan to take.

The outline, released on June 11, covers the commission’s expected work on areas such as environmental, social and governance (ESG) disclosures, proxy voting advice, share repurchases, and special purpose acquisition companies (SPACs).

On ESG disclosures, the SEC said it would particularly focus on how companies report on climate risk, human capital – including workforce and corporate board diversity – and cybersecurity risk.

The climate risk rule – 3235-AM87 – will, if passed, require companies registered with the SEC to enhance their disclosures related to “climate related risks and opportunities”.

SEC commissioner Caroline Crenshaw told the Security Traders Association podcast that it was currently “very difficult for asset managers to get access to consistent, comparable and reliable information about issuers that helps inform the asset managers’ ESG-related investment decisions”.

The development is the latest in a move away from Trump-era ESG regulation.

Shareholder democracy is also on the SEC’s agenda, with proposed amendments slated for April 2022. Measures include a proposal for rule amendments governing proxy voting advice (3235-AM92), after SEC chair Gary Gensler instigated a rule reversal earlier this month.

Further transparency rules around short sale disclosures, stock buybacks and securities-based swaps ownership have also been touted by the SEC for future legislation.

“To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us,” said Gensler.

“I look forward collaborating with my fellow commissioners and the dedicated staff to propose and finalize rules that will strengthen our markets, increase transparency, and safeguard investors.”

In total, 49 rules have been listed for action. The SEC plans to put the rules into action by October this year.