Under new Chairman Gary Gensler, the Securities and Exchange Commission is planning to issue rule proposals on climate risk, human capital and board diversity disclosures and proxy-voting advice, among other areas.
The SEC released its semiannual regulatory agenda June 11, providing a roadmap of its intentions over the next year. The list includes dozens of items and shows the SEC plans on addressing key issues pertaining to cybersecurity, environmental, social and governance investing and stock buybacks.
"To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us," Mr. Gensler said in a news release. "I look forward collaborating with my fellow commissioners and the dedicated staff to propose and finalize rules that will strengthen our markets, increase transparency and safeguard investors."
During his confirmation hearing in March, Mr. Gensler told members of the Senate Banking, Housing and Urban Affairs Committee that he supports more climate risk disclosure, pledging that the SEC will undertake economic analysis and seek public feedback on how to advance it. "There are tens of trillions of investor dollars that are going to be looking for more information about climate risk," he said at the time, adding that "issuers will benefit from such disclosures" as well.
On proxy-voting advice, Mr. Gensler on June 1 directed staff to consider recommending further regulatory action on the issue. Last year, under the Trump administration, the SEC adopted approved sweeping changes to rules governing proxy advisory firms. Those changes included allowing companies that are the subject of voting advice to be able to access that advice prior to or at the same time as the advice is disseminated to clients and obliged proxy advisory firms to provide clients with access to any response the company provides on voting advice before those clients vote.
The SEC will also revisit Rule 10b5-1 on executive stock sales. In prepared remarks before the SEC's investor advisory committee on June 10, Mr. Gensler said that when "insiders or companies adopt 10b5-1 plans, there's currently no cooling-off period required before they make their first trade. I worry that some bad actors could perceive this as a loophole to participate in insider trading."
The investor advisory committee heard from a panel of experts June 10 who said the committee should recommend increased disclosure and a cooling-off period — the time between when a 10b5-1 plan is adopted and when subsequent trades can be executed — for corporate insiders buying and selling stocks.