The SEC Is Seeking An 8% Budget Increase
On May 17, 2022, SEC Chair Gary Gensler gave testimony before the Subcommittee on Financial Services and General Government U.S. House Appropriations Committee asking for an 8% budget increase for the SEC and outlining his priorities. Although Chair Gensler expressed a desire to update rules for modern markets and technologies, his main focus is to “ensure that the SEC is adequately resourced so we can remain the cop on the beat.” As the cyclical nature of the SEC continues, it seems we are moving back towards the era of “broken windows” shepherded in by former Chair Mary Jo White in 2013 and ended in 2017 by former Chair Jay Clayton.
Reminding us of the reach of our capital markets, Gensler points out that the SEC oversees 24 national securities exchanges, 99 alternative trading systems, nine credit rating agencies, seven active registered clearing agencies, five self-regulatory organizations and other external entities. They look after the accounting and auditing functions of
Intellectual Property And Technology Risks – International Business Operations
In December 2019, the SEC Division of Corporation Finance issued CF Disclosure Guidance: Topic No. 8 providing guidance related to the disclosure of intellectual property and technology risks associated with international business operations.
The global and technologically interconnected nature of today’s business environment exposes companies to a wide array of evolving risks, which they must individually examine to determine proper disclosures using a principles-based approach. A company is required to conduct a continuing analysis on the materiality of risks in the ever-changing technological landscape to ensure proper reporting of risks. To assist management in making these determinations, the SEC has issued additional guidance.
The guidance, which is grounded in materiality and a principles-based approach, is meant to supplement prior guidance on technology and cybersecurity matters including the February 2018 SEC statement on public company cybersecurity disclosures (see my blog HERE); Director Hinman’s speech at the 18th Annual Institute on Securities Regulation in Europe in March, 2019; the SEC
The SEC Has Issued New Guidance On Cybersecurity Disclosures
On February 20, 2018, the SEC issued new interpretative guidance on public company disclosures related to cybersecurity risks and incidents. In addition to addressing public company disclosures, the new guidance reminds companies of the importance of maintaining disclosure controls and procedures to address cyber-risks and incidents and reminds insiders that trading while having non-public information related to cyber-matters could violate federal insider-trading laws.
The prior SEC guidance on the topic was dated, having been issued on October 13, 2011. For a review of this prior guidance, see HERE. The new guidance is not dramatically different from the 2011 guidance.
Introduction
The topic of cybersecurity has been in the forefront in recent years, with the SEC issuing a series of statements and creating two new cyber-based enforcement initiatives targeting the protection of retail investors, including protection related to distributed ledger technology (DLT) and initial coin or cryptocurrency offerings (ICO’s). Moreover, the SEC has asked the House Committee on Financial
