SEC unveils 4-year strategy focusing on investors, innovation and performance

The Securities and Exchange Commission unveiled a four-year strategic plan that will guide the agency’s work with a primary focus on investors, innovation, and performance. The plan’s goals reflect the agency’s commitment to its longstanding mission while leveraging the opportunities and addressing the challenges that come from fast-evolving markets, products and services.

GOAL 1. Focus on the long-term interests of Main Street investors. The SEC will strive to better understand how a wider range of investors participate in the capital markets and how to reach them while tailoring policy initiatives with retail investors in mind. Initiatives under this goal will include modernizing disclosure and expanding investor choice.

GOAL 2. Recognize significant developments and trends in our evolving capital markets and adjust our efforts to ensure effective allocation of resources. Under this goal, the SEC will embrace innovation by analyzing market developments, evaluating existing rules and procedures, understanding the continually changing cyber-landscape and ensuring the appropriate resources are dedicated to each area.

GOAL 3. Elevate the SEC’s performance by enhancing its analytical capabilities and human capital development. The SEC will invest in data and technology to leverage “the experience, knowledge, creativity, leadership and teamwork of the SEC’s staff and its leaders.” The agency is also committed to recruiting and retaining a diverse workforce with a wide range of skills and expertise.

Expanding on Goal 2, the SEC wrote on its website:

Data security and the rapid transmission of data are vital to the functioning of the US and global securities markets, and technology has fundamentally altered consumer interactions with securities market participants. On a continuous basis, investors make critical, long-term decisions that are routed through the complex IT systems underpinning the securities markets.

Main Street investors rely less on traditional personalized advisory services; they are increasingly seeking advice and pursuing trades that are informed by data analytics and executed via algorithms on electronic platforms. And, with market participants constantly searching for new technology to improve the efficiency and security of transactions, this type of change should be expected to continue.

The benefits and costs of these changes are significant in scope and magnitude and, in some cases, are not easily identified or measured. Transaction costs have come down, and efficiency and fairness have increased in many of our markets. However, increased use of, and reliance on, technology has introduced new risks and, in some cases, amplified better known market risks. For example, cybersecurity threats to the complex system that helps the markets function are constant and growing in scale and sophistication.

Similarly, markets are interconnected and interdependent. They function on a 24-hour cycle and across geographic barriers. Information from one market impacts others, and capital flows across our markets, both geographically and in asset type, in amounts that would have been unimaginable only a few decades ago.

Those looking to raise capital can explore an array of choices beyond our public capital markets, as private markets and foreign markets have become highly competitive and efficient. These developments also create regulatory and oversight challenges as the operations of large investment firms extend well beyond our borders, and new entrants to our markets—such as some of the recent sponsors of initial coin offerings, or ICOs—may seek to avoid or evade our securities laws. The need for coordination with fellow financial regulators, including foreign regulators, will continue to rise.

Read the strategic plan

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