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SEC Divisions Set Forth Views on Issuing and Trading Digital Asset Securities

In recent years, we have seen significant advances in technologies – including blockchain and other distributed ledger technologies – that impact our securities markets. This statement[1] highlights several recent Commission enforcement actions involving the intersection of long-standing applications of our federal securities laws and new technologies.

The Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets (the “Divisions”) encourage technological innovations that benefit investors and our capital markets, and we have been consulting with market participants regarding issues presented by new technologies.[2]  We wish to emphasize, however, that market participants must still adhere to our well-established … Read more

SEC Proposes Changes to Whistleblower Rule

The Securities and Exchange Commission voted on June 28, 2018, to propose amendments to the rules governing its whistleblower program. The whistleblower program was established in 2010 to incentivize individuals to report high-quality tips to the Commission and help the agency detect wrongdoing and better protect investors and the marketplace.

The Commission’s whistleblower program has made significant contributions to the effectiveness of the agency’s enforcement of the federal securities laws.  Original information provided by whistleblowers has led to enforcement actions in which the Commission has ordered over $1.4 billion in financial remedies, including more than $740 million in disgorgement of

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SEC Adopts New Requirements on Using XBRL Reporting Language for Financial Statements

The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to eXtensible Business Reporting Language (XBRL) requirements for operating companies and funds.  The amendments are intended to improve the quality and accessibility of XBRL data.

The amendments, which will go into effect in phases, require the use of Inline XBRL for financial statement information and risk/return summaries.  Inline XBRL has the potential to benefit investors and other market participants while decreasing, over time, the cost of preparing information for submission to the Commission.  The amendments also eliminate the requirements for operating companies and funds to post XBRL

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SEC Updates Definition of “Smaller Reporting Companies”

The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to the “smaller reporting company” (SRC) definition to expand the number of companies that qualify for certain existing scaled disclosure accommodations.

“I want our public capital markets to be a place where smaller companies can thrive and thereby provide our Main Street investors with more access to investing options where our public company disclosure rules and protections apply,” said SEC Chairman Jay Clayton.  “Expanding the smaller reporting company definition recognizes that a one size regulatory structure for public companies does not fit all.  These amendments to the

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SEC Proposes New Approval Process for Exchange Traded Funds

The Securities and Exchange Commission voted on June 28, 2018, to propose a new rule and form amendments intended to modernize the regulatory framework for exchange-traded funds (ETFs), by establishing a clear and consistent framework for the vast majority of ETFs operating today.  ETFs that satisfy certain conditions would be able to operate within the scope of the Investment Company Act of 1940 and to come to market without applying for individual exemptive orders.  The proposal would therefore facilitate greater competition and innovation in the ETF marketplace, leading to more choice for investors.

ETFs are hybrid investment products not originally

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SEC Adopts Changes to Disclosure of Funds’ Liquidity Risk

The Securities and Exchange Commission on June 28, 2018, adopted amendments to public liquidity-related disclosure requirements for certain open-end funds.  Under the amendments, funds would discuss in their annual or semi-annual shareholder report the operation and effectiveness of their liquidity risk management programs.  This requirement replaces a pending requirement that funds publicly provide a quantitative end-of-period snapshot of historic aggregate liquidity classification data for their portfolios on Form N-PORT.

The Commission adopted the open-end fund liquidity rule in October 2016 in an effort to promote effective liquidity risk management programs in the fund industry.  Management of liquidity risk is important

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SEC Announces Chair Mary Jo White’s Departure Plans

Securities and Exchange Commission Chair Mary Jo White, after nearly four years as the agency’s head, today announced that she intends to leave at the end of the Obama Administration.  Under Chair White’s leadership, the Commission strengthened protections for investors and the markets through transformative rulemakings that addressed major issues highlighted by the financial crisis.  The Commission also instituted a new approach to enforcement that has resulted in greater accountability and record actions through, among other things, the use of admissions of wrongdoing and enhanced data analytics and technology.

Chair White, who became the 31st Chair of the SEC in … Read more

SEC Announces Enforcement Results for 2016

The Securities and Exchange Commission announced on October 11 that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance its use of data to detect illegal conduct and expedite investigations.

The new single year high for SEC enforcement actions for the fiscal year that ended September 30 included the most-ever cases involving investment advisers or investment companies (160) and the most-ever independent or standalone cases involving investment advisers or investment companies (98).  The agency also reached new highs for … Read more