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SEC All About Main Street in 2019

SEC All About Main Street in 2019

You can rarely go wrong in politics by promising to look out for average Americans. It’s a time-honored lesson that Securities and Exchange Commission (SEC) Chairman Jay Clayton has clearly taken to heart.

The SEC’s strategic plan for 2019 invokes “Main Street investors” repeatedly throughout the 12-page document. In fact, they’re the subject of the first goal listed: “Focus on the long-term interests of our Main Street investors.”

So, what exactly does the SEC have in mind for individual investors, a growing number of whom are approaching retirement? The agency’s plan is short on specifics and long on mushy language.

For example, the commission says it wants to “enhance our understanding of the channels retail and institutional investors use to access our capital markets to more effectively tailor our policy initiatives.” That sounds a lot like “do some research.” We can also assume “modernize design, delivery, and content of disclosure so investors, including in particular retail investors, can access readable, useful, and timely information to make informed investment decisions” probably means improving the SEC’s websites.

Additionally, the strategic plan covers ramping up enforcement, one of Clayton’s chief objectives. The agency appears set on boosting its efforts in some of the more shadowy areas of the securities market, such as penny stocks: “Recently, increased focus in these areas has detected and, we believe, deterred fraud that impacts our retail investors.”

Growing the number of investment options for retail investors also seems to be a key priority for the SEC. That entails enticing more companies to list on U.S. stock exchanges and register with the SEC. Already this year, Clayton has called for opening up private companies to Main Street investors.

Meanwhile, Wall Street’s watchdog plans to continue adapting to the effects of technological innovation on the investing marketplace. That includes strengthening cybersecurity and accounting for new developments in electronic trading.

Cryptocurrencies probably fall somewhere under the innovation heading, too. Clayton has played coy about the future of the SEC’s involvement with Bitcoin and other forms of virtual money. However, the agency has kept the door ajar for listing a cryptocurrency exchange-traded fund (ETF), and it’s difficult to see how the financial securities regulator can make it through another year without offering more definitive guidance on cryptocurrencies in general.

Implementing more robust use of data and analytics also is on the SEC’s 2019 agenda. The strategic plan notes that the agency is developing a data management program “to leverage data analytics to allocate our resources most effectively in furtherance of our mission” using “practices that appropriately reflect the sensitivity of that data.”

Despite the strategic plan’s squishy wording, from cybersecurity to cryptocurrency, that’s a laundry list of goals for a government agency. And who knows what else the mercurial Trump administration could add to it on a whim. Clayton may want to rest up over the holidays–sounds like he will need it next year.

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