With every new administration, change is imminent. That was no different for the U.S. Securities and Exchange Commission (SEC). In February 2021, President Joe Biden announced he was appointing Gary Gensler as the new chairman of the SEC. Gensler was sworn in as Chairman on April 17, 2021.
On June 11, 2021, the SEC publicly announced Gensler’s top items positioned for regulatory action in 2021, including:
In the four months since his appointment to office, he has wasted little time putting his priorities into action in order to protect investors.
Gensler indicated to the House Financial Services Committee and the House Appropriations Committee that there has been “an unprecedented surge in non-traditional IPOs by special purpose acquisition companies.” Given the surge in this activity, Gensler has directed the Divisions of Corporate Finance, Examinations, and Enforcement to look at the various stages of the process for fraud and potential violations.
Regarding private equity and adviser disclosures, Gensler has indicated that “there is no self-regulatory organization for investment advisers like there is for broker-dealers” and has asked staff to enhance the “disclosures of investment risks and conflict of interest, fees, and expenses, liquidity, valuation of assets, and controls around material non-public information.”
Gensler indicated ESG concerns were “one of his top priorities.” A request for public feedback closed on June 15, 2021, regarding ESG disclosure requirements. He is hoping that the proposed disclosure requirements will provide investors with the information they need to make sound investment decisions.
Given the market events that occurred earlier this year related to GameStop, Reddit and Robinhood, gamification became one of Gensler’s priorities. Gamification is the application of game playing to encourage engagement with a product or service, Gensler is pushing for several new regulations surrounding this area. He has asked his staff to “ensure investors using apps with these types of features continue to be appropriately protected and consider how all of our rules apply in these situations.”
Gensler has made it public that he feels “the investing public would benefit from more protection on the crypto exchanges.”
As Gensler continues as chairman of the SEC, we will monitor how policy changes will shape your business. Watch our newsletter and website for key articles related to this topic.