SEC Chair Lists Priorities: Includes Proxy Advisors & Shareholder Proposal

Last week, SEC Chair Jay Clayton delivered this speech, where he outlined where the SEC stands on its rulemaking agenda – as well as the priorities for 2019. See Exhibits A & B of the speech for handy charts (and this blog from Davis Polk’s Ning Chiu and WSJ article). Key initiatives include:

– Reviewing ownership & resubmission thresholds for shareholder proposals – including whether there are factors in addition to the amount of money invested and length of holding period that would reasonably demonstrate the shareholders’ interests are aligned with those of long-term investors

– Proxy advisor reforms – including transparency, conflicts, whether certain matters should be analyzed on a company-specific basis (rather than market-wide), and investor access to issuer responses to reports

– Proxy plumbing – focusing on improvements to the current system, rather than a major overhaul

– Cybersecurity – including disclosure controls & procedures, insider trading policies, risk factor disclosures, and the SEC’s own cyber-risk profile

– Brexit & LIBOR disclosures – SEC is monitoring these risks and whether their impact is adequately disclosed

– ICOs – continuing 2018 efforts to protect investors

– Quarterly reporting & guidance – studying the current regime to determine whether it can be improved

– Capital formation & access to investment opportunities (Jobs Act 3.0) – expanding testing-the-waters and making Regulation A available to public companies