"I support this agenda as it reflects the need to modernize our rule set, moving deliberately to update our rules in light of ever-changing technologies and business models in the securities markets," SEC Chairman Gary Gensler said in a statement. "Our ability to meet our mission depends on having an up-to-date rulebook — consistent with our mandate from Congress, guided by economic analysis and shaped by public input."
The proposed rules include enhanced disclosures for companies regarding human capital management and corporate board diversity, respectively; changes to registered investment companies' fees and fee disclosure; and added rules to address the "cybersecurity and resiliency of certain commission registrants."
Moreover, the SEC is considering amendments to "modernize rules related to equity market competition and structure such as those relating to order routing, conflicts of interest, best execution, market concentration, pricing increments, transaction fees, core market data, and disclosure of order execution quality statistics."
John J. "Jack" O'Brien, a partner with Morgan, Lewis & Bockius, said "it's going to be an extremely busy year" at the SEC.
The agency was active in 2022, proposing 29 rules and reopening comment periods on a host of other proposals.
Many of the rules could be finalized this year, including ones that could reshape large segments of the nation's financial markets and the information public companies and private fund managers must publicly disclose.
Notably, the SEC proposed a rule to require public companies to disclose a host of climate-related information in their registration statements and periodic reports. Under the proposal, public companies would be required to disclose the greenhouse gas emissions they generate or purchase, and the indirect emissions generated from a company's supply chain, if material, though smaller companies would be exempt from the latter requirement, referred to as Scope 3. Some stakeholders in the business community and Republicans in Washington said the proposal exceeds the SEC's authority.
The SEC is aiming to finalize the climate disclosure rule by the end of April, according to its agenda.
It listed the same timeline for finalizing several other rules, including ones that would compel private fund managers to provide investors with quarterly statements detailing information about performance, fees and expenses, and another that would shorten the settlement cycle to T+1 — settling a trade one business day after it is executed — from T+2, or two business days.
"Gary Gensler has proven that he's very driven in his view of what the market needs in terms of regulation and if any chairman is going to get things through, it's him," Mr. O'Brien said. "I would be very surprised if there weren't a number of final rules adopted end of Q1, early Q2 and an equal number of new proposals on that same timeline."