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The SEC Continues to Modernize and Adapt to the Times

​The Securities and Exchange Commission (“the Commission") recently adopted two rule amendments in its latest effort to synchronize Commission policies with the rapidly developing digital age.

The first set of amendments (effective May 14, 2018) available here includes minor revisions to Regulation S-T and the Description of Exchange Act Forms (17 CFR parts 232 and 249) to remove items in certain SEC forms (e.g., Forms Funding Portal, MA, MA-I, MSD, and Instructions for the Form MA series)[1] requiring filers to disclose personal information, such as their date of birth or social security number. The updated forms address the ever‑increasing cybersecurity risk faced by filers disclosing personal identifying information. Specifically, the Commission notes the potential cost to filers “in the event of unauthorized access or release of certain sensitive [personal information,]" including “ongoing identity protection and monitoring, reputation costs, operational costs, and losses from theft[.]" This string of minor amendments will help filers protect their personal information and avoid the unnecessary risks and costs all too common in an era of continuous large-scale data breaches.

The second amendment (effective June 1, 2018) available here relates to the Commission's Rules of Practice (17 CFR parts 200 and 201) and addresses the shifting technological preferences of its stakeholders. Specifically, the amendment eliminates publication of the “SEC Docket," a weekly compilation of relevant SEC actions. All of the information currently compiled in the weekly Docket is available in digital form on the Commission's website at the time of publication. As justification for the Docket's elimination, the Commission noted “the Docket generally receives less than 0.01% of all SEC website traffic" but requires “approximately 600 staff hours" to prepare each year.  

Together these amendments evidence the Commission's willingness to actively review internal policies and procedures and make changes where appropriate. These recent amendments protect filers providing information, but they also better serve investors relying on the SEC for information – all while minimizing unnecessary burdens and costs.

Thanks to Collin Metcalf in the Houston office for the summary above.

   [1]   The Securities Act of 1934 (as amended) created these forms as a registration requirement for crowdfunding portals (Forms Funding Portal), municipal advisors and advisory firms (Forms MA and MA-I) and municipal securities dealers (Form MSD). The Commission admits the elimination of certain personal identifying information “could incentivize additional participants to register as crowdfunding portals, municipal advisors, and municipal securities dealers" but concludes “the likely effects on competition, allocative efficiency and capital formation" will be “marginal." ​

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