On June 22, the Office of Information and Regulatory Affairs (OIRA) released the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions. OIRA is the government’s central authority to review executive branch regulations. The report, which includes both short- and long-term regulatory actions that administrative agencies plan to take, notably included several contributions from the Securities and Exchange Commission (SEC).

The SEC’s rulemaking agenda “is driven by two public policy goals: continuing to drive efficiency in our capital markets and modernizing our rules for today’s economy and technologies,” said SEC Chair Gary Gensler. Mr. Gensler believes focusing on these two objectives will help the SEC achieve its three-part mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital information. Mr. Gensler went on to add that “[t]he U.S. is blessed with the largest, most sophisticated, and most innovative capital markets in the world … but we cannot take that for granted.”

The SEC’s 2022 rulemaking list includes proposed rules on a wide range of topics, including corporate board diversity, Rule 144, SPACs, Reg. D, cybersecurity, Rule 10b5-1 and insider trading, amendments to the SEC’s Whistleblower Program Rules, among others.

Specifically, the SEC proposed two new environmental, social, and governance-focused (ESG) rules aimed at the advisory and investment company area. For example, the SEC proposed amendments to the “Names Rule” under the Investment Company Act of 1940 and proposed amendments for investment advisers and investment companies to facilitate enhanced ESG-related disclosures.

The current Names Rule refers to Section 35(d) of the Investment Company Act, which prohibits registered investment companies from adopting names that the SEC finds materially deceptive or misleading and requires that the investment fund adopt a policy to invest at least 80% of the value of its assets in accordance with its name. The current rule is limited to fund names that suggest investments in a type of security, industry, geographic region or suggest they are backed by the U.S. government. Additionally, it does not apply to names that indicate a specific investment focus or strategy and allows funds to define terms used in their names in a reasonable way.

The new proposed rule seeks to impose seven primary additional requirements: (1) the expansion of the current Names Rule to fund names, suggesting certain investment characteristics; (2) changing various registration forms to include disclosures that define terms used in the fund’s name; (3) addressing temporary deviations from the 80% investment requirement; (4) providing guidance on derivative valuation; (5) restricting fundamental investment policy changes for unlisted closed-end funds and business development companies; (6) prohibitions for integration funds; and (7) new bookkeeping requirements.

The proposed changes to the Name Rule is just one of the many areas the SEC is focused on this year. With an increased regulatory focus on efficient capital markets and modernizing rules to reflect the complexity of today’s economy and technological advances, it will be important to pay close attention to the progression and implementation of the SEC’s proposed rules.

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Photo of Jay Dubow Jay Dubow

Jay co-leads the firm’s Securities Investigations + Enforcement Practice Group. He focuses his practice on complex business litigation, with a special emphasis on defending against shareholder derivative and securities class action litigation. He also represents clients involved in investigations by the U.S. Securities…

Jay co-leads the firm’s Securities Investigations + Enforcement Practice Group. He focuses his practice on complex business litigation, with a special emphasis on defending against shareholder derivative and securities class action litigation. He also represents clients involved in investigations by the U.S. Securities and Exchange Commission (SEC), the Pennsylvania Department of Banking and Securities, and various self-regulatory organizations, including the Financial Industry Regulatory Authority, Inc. (FINRA). He also conducts internal investigations on behalf of clients. Such investigations have included allegations involving the Foreign Corrupt Practices Act (FCPA), whistle blower claims, financial fraud, and civil and criminal violations of various federal and state laws.

Photo of Tim Bado Tim Bado

Tim is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, with a primary focus on financial services litigation. He is part of the firm’s national practice defending consumer-facing companies in both individual and class actions against claims brought…

Tim is an attorney in the firm’s Regulatory Investigations, Strategy + Enforcement (RISE) Practice Group, with a primary focus on financial services litigation. He is part of the firm’s national practice defending consumer-facing companies in both individual and class actions against claims brought under the Fair Credit Reporting Act (FCRA), Fair Debt Collection Practices Act (FDCPA), Telephone Consumer Protection Act (TCPA), Real Estate Settlement Procedures Act (RESPA), and the Driver’s Privacy Protection Act (DPPA). Tim also defends national banks and mortgage servicers from complaints and investigations brought by federal regulators. He has defended companies in individual and class actions in numerous states, including, Georgia, California, Colorado, Florida, Illinois, Kentucky, Louisiana, Minnesota, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington.

Photo of Thomas Cordova Thomas Cordova

As a member of the firm’s White Collar + Government Investigations Practice Group, Thomas counsels and defends corporations, and their employees and executives in government investigations and enforcement matters, with a particular focus on the False Claims Act and Anti-Kickback Statute. Thomas has…

As a member of the firm’s White Collar + Government Investigations Practice Group, Thomas counsels and defends corporations, and their employees and executives in government investigations and enforcement matters, with a particular focus on the False Claims Act and Anti-Kickback Statute. Thomas has conducted sophisticated internal corporate investigations and regularly advises clients on compliance strategies. He has additional experience defending corporations and individuals against various securities fraud allegations.