The Securities and Exchange Commission this week made public a new strategic plan that is intended to guide the agency’s work over the next four years “with a primary focus on investors, innovation, and performance.”
“Our new strategic plan is a concise, straight-forward explanation of the goals that will guide us as our markets evolve,” said Chairman Jay Clayton. “It is based on the core values that have motivated the women and men of the SEC for over 80 years, including, most importantly, serving the interests of our long-term Main Street investors.”
The plan was published in accordance with the Government Performance and Results Modernization Act of 2010, which requires federal agencies to outline their missions, planned initiatives, and strategic goals for a four-year period.
The goals and initiatives cover all of the Commission’s five divisions and 25 offices.
Goal 1: Focus on the long-term interests of our 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.
The Commission has identified several initiatives in pursuit of this strategic goal, including:
Enhancing its understanding of the channels retail and institutional investors use to access capital markets, and more effectively tailor our policy initiatives.
Enhancing outreach, education, and consultation efforts, including in ways that are reflective of the diversity of investors and businesses.
Regulatory programs should reflect the reality that not all investors, businesses, and securities markets are the same. The Commission will expand outreach to retail investors and small businesses to better enable the agency to hear their various perspectives and to ensure we provide investors and businesses timely and relevant guidance.
Pursuing enforcement and examination initiatives focused on identifying and addressing misconduct that impacts retail investors.
Expanding efforts in various areas, including, for example, securities custody and penny stock trading.
Modernizing 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.
Identifying ways to increase the number and range of long-term, cost-effective investment options available to retail investors, including by expanding the number of companies that are SEC-registered and exchange-listed.
Goal 2: Recognize significant developments and trends in our evolving capital markets and adjust our efforts to ensure we are effectively allocating our 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.
“As technological advancements and commercial developments have changed how our securities markets operate and spurred the development of new products, the SEC’s ability to remain an effective regulator requires that we continually monitor the market environment—and adapt,” the plan says. The Commission should expand focus, expertise, and scope of operations in vital areas such as market monitoring analysis, market operations, including clearing and settlement, and electronic trading across its equity, fixed-income, and other markets.
Specific initiatives include:
Identifying and taking steps to address existing rules and approaches that are outdated.
In the pursuit of “effective rulemaking,” continually analyzing and seeking feedback from investors and others about where rules are, or are not, functioning as intended.
Focusing on ensuring that market participants the Commission regulates are actively and effectively engaged in managing cyber-security risks and that these participants and the public companies it oversees are appropriately informing investors and other market participants of these risks and incidents.
Promoting agency preparedness and emergency response capabilities.
Providing regular training and testing to promote a clear understanding of roles and responsibilities at the Commission, and reviewing and testing plans periodically to evaluate its preparedness as risks evolve.
Goal 3: Elevating the SEC’s performance by enhancing our analytical capabilities and human capital development.
The Commission 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.
Goal-related initiatives include:
Focusing on the SEC’s workforce “to increase our capabilities, leverage our shared commitment to investors, and promote diversity, inclusion, and equality of opportunity among the agency’s staff.”
A focus on recruiting, retaining, and training staff with the right mix of skills and expertise.
Promoting diversity, awareness, inclusion, and mutual respect within its workforce.
Expanding the use of risk and data analytics to inform how the Commission sets regulatory priorities, and focus staff resources, including developing a data management program that treats data as an SEC-wide resource with appropriate data protections, enabling rigorous analysis at reduced cost.
Leveraging data analytics to allocate Commission resources most effectively.
“At the same time, it is also imperative that the SEC have data management practices that appropriately reflect the sensitivity of that data,” the plan says. “Under this initiative, the agency will advance our risk analytics and data management programs. Working collaboratively across the SEC’s divisions and offices, we will invest in needed data streams, deploy new technological tools, where appropriate, and improve our enterprise data management practices and infrastructure.”
Enhancing analytics of market and industry data to prevent, detect, and prosecute improper behavior.
“Data analytics are essential to rooting out wrongdoing in our markets,” the plan says. “The SEC will continue to invest in the data and tools needed for our enforcement and examination programs to uncover and prosecute violations of the federal securities laws.”
Enhancing the agency’s internal control and risk management capabilities, including developing a robust and resilient program for dealing with threats to the security, integrity, and availability of the SEC’s systems and sensitive data.
Expanding and strengthening internal enterprise risk capabilities, including through the establishment of a new chief risk officer position to lead and coordinate the agency’s various risk management efforts.
Promoting collaboration within and across SEC offices.
“With more Americans directly responsible for their own investment choices, access to timely, material, and quality business and accounting disclosure to inform investment decisions has increased in importance,” the Commission adds in its strategic plan. It will “continue to reexamine business and accounting disclosure requirements and modernize EDGAR, the information technology system that filers use to make critical public disclosures for the benefit of current or prospective investors.”
“These initiatives should make it easier for investors to find key information, while also making the system more efficient and secure for filers,” SEC staff wrote.