The changes could potentially effect US listed equities across the board, and by implication UK asset managers and wealth mangers which invest in them, or have US-based clients.
SEC chief of staff Andrew Donohue will deliver the keynote address and take questions at the SEC Regulation Outside the United States event on 28th June. He will be accompanied by senior officials from various SEC divisions, as well as the deputy director of the unit that is empowered to visit and inspect non-US brokers and investment managers.
The SEC recently launched a 341 page consultation paper that seeks input into possible changes to nearly every aspect of the way companies listed on American exchanges disclose information to the public. The paper asks 800 questions of market participants.
“If this gets traction it could lead to sweeping and welcome changes to the US public company disclosure regime” says Washington-based lawyer Alexander Cohen, a partner at Latham & Watkins. “Reforms of this scale are a hugely ambitious project and it’s of course hard to know where this will go in an election year when there are so many forces at play. If they were to make significant changes to disclosure rules it wouldn’t just affect companies operating in the US – it could have knock on effects in capital markets all over the world.”
“It touches on everything,” added Dan Goelzer, senior counsel from Baker & McKenzie, who like Cohen is a former SEC lawyer. “It’s a once-in-a-generation effort to rethink the commission's public company disclosure requirements, including everything from what is and isn't important to investors, to how information should be formatted and presented.”
“The SEC is exploring such basic things as the future of quarterly reporting, whether to require a broad range of sustainability and social responsibility disclosures and whether disclosure requirements should be scaled to company size,” Goelzer added.
The SEC has a series of other proposals under consideration at the moment, including restricting the use of derivatives within funds, applying swing pricing to support fund liquidity and forcing companies to tighten up cyber security to protect the sensitive data of investors. It is also looking to set up a single, comprehensive database to allow regulators to track all trading activity in the US equity and options markets to help identify and investigate misconduct.