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Following the revelation of the Securities and Exchange Commission (SEC) regulatory agenda under the leadership of Chairman Gary Gensler, two commissioners issued a statement criticizing the list of rules and regulations the Commission is expected to address in the coming months.
In addition, the two Commissioners questioned the missing topic of digital assets and how the Commission will proceed in the future.
Gensler, an expert in blockchain and Fintech in general, has apparently avoided a subject of deep innovation that suffers from opaque regulation. Industry participants continue to struggle with the lack of clear rules and “regulation by application” – to the point that some innovators have established operations in other jurisdictions.
As covered over the weekend, the SEC outlined a wide range of regulations and potential amendments, including exempt securities offerings and the definition of accredited investors – a policy area that may impact capital formation in line.
Reg D, a market that exceeds a trillion dollars a year, has long been considered a huge success because it is the most popular exemption used by promising start-ups. Any change could potentially undermine this critically important market.
Regarding the definition of qualified investor, the last Commission tried to make the definition more inclusive by allowing better access for individuals to participate in the private securities market. Although the objective is not yet clear, the Commission may consider restricting access further, thereby further depriving small investors of their rights.
Commissioners Hester Peirce and Elad Roisman say that “the agenda makes it clear that the president’s recent directive to SEC staff to consider reviewing recent regulatory action” – rules accomplished during the last administration.
Both commissioners point to proxy voting, harmonization, the definition of an accredited investor, and more as an ongoing problematic reduction already accomplished by the SEC.
To quote Commissioners Peirce and Roisman:
“Not only are the most recent Commission changes to each of these rules less than a year old; they were only effective for a period of three to seven months. As far as we can tell, the agency has not received any new information that would justify opening any of these rules to further changes at this time. We are disappointed that the Commission is devoting our scarce resources to overhauling the newly completed rules. The agency has always adopted a transparent, methodical and rigorous rule-making process to ensure that its rules reflect sound policy, transcend political differences, and thereby enable our registrants to operate under a consistent and predictable regulatory regime.
The Commissioners note that a change in leadership obviously includes a change in policy, but the list includes policy changes without any “new evidence to justify reopening” these rules.
“We hope that President Gensler reconsiders the need to revisit the newly developed rules, but we look forward to working with him and our fellow Commissioners on other regulatory initiatives reflected in the agenda and on resolving issues of concern. ‘continuing importance such as fraud from older investors and small businesses. capital formation. “
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