Columbia Law School
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Thank you, Chair Gensler, Renee [Jones], Charles [Kwon], and Jessica [Wachter] for the presentation. The Commission’s 2022 budget request includes additional resources to address “an unprecedented surge in non-traditional IPOs by special purpose acquisition companies.”[1] If we adopt the rule that we are voting on today, we will not need additional resources to deal with Special Purpose Acquisition Companies (“SPACs”). The proposal—rather than simply mandating sensible disclosures around SPACs and de-SPACs, something I would have supported—seems designed to stop SPACs in their tracks. The proposal does not stop there; it also makes a lot of sweeping interpretations of the
Hester M. Peirce
SEC Commissioner Peirce Criticizes Proposed Mandatory Climate Risk Disclosures
Thank you, Chair Gensler. Many people have awaited this day with eager anticipation. I am not one of them. Contrary to the hopes of the eager anticipators, the proposal will not bring consistency, comparability, and reliability to company climate disclosures. The proposal, however, will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable, and reliable company disclosures. We cannot make such fundamental changes to our disclosure regime without harming investors, the economy, and this agency. For that reason, I cannot support the proposal.
The proposal turns the disclosure regime on its head. Current SEC disclosure mandates
SEC Commissioner Peirce Dissents on Cybersecurity Proposal
Thank you, Renee, Ian, and Jessica. Cybersecurity risk is top of mind for everyone. The Commission’s consideration of this topic—whether for investment advisers, as we did a month ago,[1] or public companies, as we are doing today [March 9]—is, therefore, reasonable. We must approach this topic, of course, through the prism of our mission. We have an important role to play in ensuring that investors get the information they need to understand issuers’ cybersecurity risks if they are material. This proposal, however, flirts with casting us as the nation’s cybersecurity command center, a role Congress did not give us. … Read more
SEC Commissioner Peirce Speaks on Private Fund Advisers Proposal
Today’s [February 9] proposal represents a sea change. It embodies a belief that many sophisticated institutions and high net worth individuals are not competent or assertive enough to obtain and analyze the information they need to make good investment decisions or to structure appropriately their relationships with private funds. Therefore, the Commission judges it wise to divert resources from the protection of retail investors to safeguard these wealthy investors who are represented by sophisticated, experienced investment professionals. I disagree with both assessments; these well-heeled, well-represented investors are able to fend for themselves, and our resources are better spent on retail
SEC Commissioner Peirce Dissents on Proposal to Amend Regulation ATS
Events in the U.S. Treasury market (as well as the related repo market) over the past several years strongly suggest that the market for government securities suffers from inadequate levels of intermediation, liquidity, and transparency that in times of stress can dramatically decrease its ability to function properly and significantly increase risks to market participants.[1] Commentators have suggested a number of possible reforms,[2] and, although I am skeptical of some of these suggestions, I agree that the Commission should be considering carefully how it might use its authority to make changes that could relieve some of these pressures
SEC Commissioner Peirce Dissents on Universal Proxy Rules
I support universal proxy, but not today’s version of universal proxy.
Shareholders voting by proxy should be able to split their vote among company and dissident nominees. Allowing shareholders a straightforward way of choosing a mixed slate through a universal proxy card can facilitate sensible changes to board composition. Universal proxy makes sense for both operating companies and investment companies. This particular universal proxy rule, however, may facilitate changes to the company that advance special interests rather than enhancing corporate value by serving as a tool for frivolous, as well as serious, activists. I might have been able to support
SEC Commissioners Discuss Report on “Meme Stock” Episode
Today [October18], the staff issued a report on the so called “meme stock” episode that occurred this past January. We would like to thank the staff not only for their hard work on this report, but also for keeping the Commission fully and timely informed during the period of extreme volatility discussed in the report. While the report includes an interesting account of the events, it does not appear that many conclusions can be drawn from the data. This report should have been an anodyne report on the events of earlier this year and, if evident from the data, an … Read more
SEC Commissioner Peirce on Nasdaq Board Diversity Proposal
I write in opposition to the approval of the Board Diversity Proposal (“Board Diversity Proposal” or “Proposal”) submitted for approval by the Nasdaq Stock Market LLC (“the Exchange”).[1] The Proposal attempts to expand opportunity, a goal I share,[2] but it does so in a way that improperly leverages authority that Congress has entrusted to it under the Exchange Act. Because the Exchange cannot show that its Proposal is consistent with the Exchange Act, and because the Proposal is in fact outside the scope of the Act and contrary to fundamental Constitutional principles, I cannot support its approval.[3]
SEC Commissioner Peirce Speaks on ESG Disclosure
This summer was the summer of the cicadas. The dull hum of their song permeated the solitude of an evening stroll, along with the disconcerting crunch as pedestrian attempts to avoid squashing the creatures inevitably failed. Every seventeen years the beady-eyed cicadas emerge from underground—a natural wonder, perhaps therefore to be forgiven for their uncouth habits and off-putting appearance.[1] As eighteenth century farmer and self-taught naturalist Benjamin Banneker, having observed three appearances of cicadas, wrote:
[I]f their lives are Short they are merry, they begin to Sing or make a noise from the first they come out of Earth … Read more
SEC Commissioners Comment on Chair Gensler’s Regulatory Agenda
Last Friday, the Office of Information and Regulatory Affairs released the Spring 2021 Unified Agenda of Regulatory and Deregulatory Action (“Agenda”), which includes the SEC Chair’s Agenda.[1] While there are important and timely items on the list, including rules related to transfer agents and government securities alternative trading systems, the Agenda is missing some other important rulemakings, including rules to provide clarity for digital assets, allow companies to compensate gig workers with equity, and revisit proxy plumbing. Perhaps the absence of these rules is attributable to the regrettable decision to spend our scarce resources to undo a number of
SEC Commissioners Respond to Chairman’s Call for Review of Proxy-Voting Advice Rules
Today [June 1], Chair Gensler announced that he has directed the SEC staff to consider whether to recommend that the Commission revisit its recent regulatory actions taken with respect to proxy voting advice businesses and its longstanding interpretation of proxy solicitation.[1] Additionally, the staff announced that it will not recommend an enforcement action against a proxy voting advice business that fails to comply with the Commission’s existing requirements for proxy voting advice.[2]
As background, last July, the Commission adopted requirements that proxy voting advice businesses, in order to rely on exemptions from the information and filing requirements of
SEC Commissioner Speaks at Asset Management Advisory Committee Meeting
Good morning to you all and thank you Ed [Bernard]. It is always a pleasure to welcome the hard working volunteers of AMAC back to the Commission. I also want to thank Sarah ten Siethoff and the staff of the Division of Investment Management for their work in keeping AMAC’s wheels turning. In particular, I would like to thank Christian Broadbent, Jay Williamson, Walé Oriola, and Emily Rowland who are so instrumental in making these meetings happen.
We are now well into the New Year but in some respects, 2021 is looking a lot like 2020. We continue to interact
Commissioners Discuss SEC’s Enhanced Climate-Change Efforts
Over the past two weeks, we and the public have seen a steady flow of SEC “climate” statements and press releases.[1] Our Divisions of Corporation Finance, Examinations, and Enforcement all have announced climate- or ESG-related initiatives. What does this “enhanced focus” on climate-related matters mean? The short answer is: it’s not yet clear. Do these announcements represent a change from current Commission practices or a continuation of the status quo with a new public relations twist? Time will tell. In the meantime, it is important to contextualize the recent announcements by providing some historical and procedural background.
The Division
SEC Commissioner Peirce on Shareholder Proposals under Exchange Act Rule 14a-8
Thank you, Chairman Clayton. I support today’s amendments to certain procedural requirements and the resubmission thresholds under the shareholder proposal rule. While it can be difficult to discern the signal from the noise around today’s amendments, the reality of the situation is that we are making simple, sensible, and long over-due changes to the shareholder proposal rule.
Shareholder proposals are costly: they require the thoughtful attention of management and the board, procurement of legal advice, engagement with shareholder proponents and SEC staff, the printing and mailing of proposal materials, and vote tabulations. The shareholder-proponent does not bear these costs; the
SEC Commissioner Speaks on Financial Market Regulation
Whenever I talk to economists, since I cannot awe you with a fancy equation, I have to start with a bad joke. It is a knock-knock joke, which is especially hard to pull off when trying to physically distance. “Knock, knock.” “Who’s there?” “Economist.” “Economist who?” “I kin’ o’ missed you too!” It is a really bad joke, but I really do miss having you all here at the SEC in person and hope that will soon be a possibility. Before I begin, I must give my usual disclaimer: the views I will be expressing today are my own, and
SEC Commissioner Peirce Speaks on Corporate Governance
We are here today to talk about excellence in corporate governance. Before I begin, I have to remind you that the views I represent are my own and not necessarily those of the Securities and Exchange Commission or my fellow Commissioners. As with other pursuits in life, governing a corporation well requires a solid set of core values. These values are often rooted in childhood lessons, so I will offer a cautionary tale. A friend of mine—over his wife’s objection—taught his toddler son to answer “Money!” when asked “What is the most important thing in the world?” Their son was
Commissioner Peirce Speaks to SEC Investor Advisory Committee
Thank you Anne [Sheehan] and other members of the committee for arranging an impressive list of panelists to share their views and perspectives on the important topics on today’s agenda. The committee has not let COVID-19 stop it from holding meetings; this is the third such meeting in the last two months. I am appreciative of the committee’s diligence and dedication during this time and believe it is emblematic of the tireless efforts put forth over the years by the members whose terms are expiring in the coming days.
I want to take a moment to thank each of you
SEC Commissioner Dissents from Order Blocking Proposed Bitcoin-Related Rule
Today the Commission once again disapproved a proposed rule change that would give American investors access to bitcoin through a product listed and traded on a national securities exchange subject to the Commission’s regulatory framework.[1] This order is the latest in a long string of disapproval orders that the Commission has issued regarding bitcoin-related products.[2] This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on
SEC Commissioner Peirce Offers Proposal to Fill Gap Between Regulation and Decentralization
I appreciate the opportunity to be with all of you today. Before beginning, I have to remind you that the views I express are my own and do not necessarily represent those of the Securities and Exchange Commission or my fellow Commissioners.[1] Indeed, the views I will express today are not fully formed in my own mind and may not reflect my own opinions in the months to come. To that end, I welcome the feedback of all of you and anyone else with an interest in the regulation of digital assets. These issues are difficult, and many bright
SEC Commissioner Peirce Speaks before National Economists Club
Thank you, Cliff [Waldman] for that kind introduction. It is an honor to be among economists today. I am not sure why, but every time I speak to economists, I feel compelled to tell a joke. Maybe it is because the securities lawyers of which I am one and with whom I routinely surround myself can be a rather serious bunch. Instead of starting with jokes, they insist that we start our talks with the following disclaimer: The views I represent are my own and not necessarily those of the Securities and Exchange Commission or my fellow Commissioners. That duty