SEC Releases Draft Strategic Plan for Fiscal Years 2022 to 2026

The US Securities and Exchange Commission recently released its draft Strategic Plan for fiscal years 2022 to 2026 for public comment.

The Strategic Plan sets forth the following three key goals for the Securities and Exchange Commission (SEC):

1. Protect working families against fraud, manipulation, and misconduct.
2. Develop and implement a robust regulatory framework that keeps pace with evolving markets, business models, and technologies.
3. Support a skilled workforce that is diverse, equitable, and inclusive and fully equipped to advance agency objectives.

The Strategic Plan identifies several initiatives the SEC will pursue to achieve these three goals.

1. Protect working families against fraud, manipulation, and misconduct

To achieve this goal, the SEC will continue its current enforcement and examination programs with an emphasis on protecting individual investors. The Strategic Plan points to a renewed focus on accountability and deterrence initiatives, including efforts to hold responsible individuals, or gatekeepers, accountable for misconduct.

Under the Strategic Plan, the SEC will also continue to enhance its current data management and analysis framework and its use of market and industry data to prevent, detect and enforce against misconduct. This will include expanding the SEC’s disclosure and analytical tools and broadening machine learning and artificial intelligence to supports its oversight efforts and identify market developments and risks.

In response to an increased investor demand for information related to, among other things, climate risks, cybersecurity hygiene policies, and workforce, the Strategic Plan proposes that the SEC update its disclosure framework to better address these topics and modernize its systems to make public disclosures easier for investors to access.

2. Develop and implement a robust regulatory framework that keeps pace with evolving markets, business models, and technologies

To address this goal, the Strategic Plan proposes to (1) update existing SEC rules and regulations to reflect such evolving markets, business models, and technologies, including enhancing transparency in private markets and developing regulations to ensure investor protection via a broad-based disclosure framework; (2) address systemic and infrastructure risks faced by capital markets and market participants, including the risks posed by the rapid growth in cryptoassets and the pandemic, which will be pursued in part by seeking new authority from Congress; and (3) enhance the SEC’s expertise in market developments, trends, and products (such as cryptoassets, derivatives, and fixed income) and continue to focus on investor education and outreach.

3. Support a skilled workforce that is diverse, equitable, and inclusive and is fully equipped to advance agency objectives

The SEC will continue to focus on growing a diverse workforce, promoting collaboration within and across SEC offices, enhancing internal control and risk management capabilities, and modernizing the SEC’s technology.

Next Steps

Public comments to the Strategic Plan must be submitted on or before September 29, 2022. Morgan Lewis will continue to closely monitor how the Strategic Plan may impact clients.