Oversight of the Securities and Exchange Commission (EventID=117682)

Video Description

Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinancialCmte Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, September 24, 2024, at 10:00 a.m. (ET) full Committee Chairman McHenry and Ranking Member Waters will host a hearing entitled, “Oversight of the Securities and Exchange Commission." ___________________________________ Witnesses for this one-panel hearing will be: • The Honorable Gary Gensler, Chairman, U.S. Securities and Exchange Commission • Hester Peirce, Commissioner, U.S. Securities and Exchange Commission • Caroline Crenshaw, Commissioner, U.S. Securities and Exchange Commission • Mark Uyeda, Commissioner, U.S. Securities and Exchange Commission • Jaime Lizárraga, Commissioner, U.S. Securities and Exchange Commission ___________________________________ Background During the peak of the Great Depression, Congress passed the Securities Act of 1933 and the Securities and Exchange Act of 1934, which created the Securities and Exchange Commission (SEC). The SEC’s tripartite mission is to: (1) protect investors; (2) maintain fair, orderly, and efficient markets; and (3) facilitate capital formation. Pursuant to its statutory mandate, the SEC oversees more than 30,000 registered entities, including investment advisers, mutual funds and exchange traded funds, broker-dealers, national securities exchanges, credit rating agencies, clearing agencies, the Public Company Accounting Oversight Board (PCAOB), the Financial Industry Regulatory Authority (FINRA), the Municipal Securities Rulemaking Board (MSRB), the Securities Investor Protection Corporation (SIPC), and the Financial Accounting Standards Board (FASB). The SEC also oversees over $125 trillion in securities trading annually and reviews the disclosures of approximately 8,700 reporting companies. Under Chair Gensler, the SEC has made the digital asset ecosystem a primary focus. The SEC continues to pursue an aggressive enforcement and regulatory agenda to extend the SEC’s authority over the entire digital asset ecosystem. In particular, under Chair Gensler, the SEC has failed to release guidance explaining how the SEC determines whether a digital asset meets the definition of a security. Rather, Chair Gensler and the SEC have publicly opined, including before Congress, that the “vast majority” of digital assets are securities. The SEC’s lack of clear guidance or regulatory framework has left the digital asset ecosystem in a state of regulatory and legal uncertainty, threatening the ecosystem’s existence in the United States. Consequential Rulemaking Climate Risk Disclosures On March 6, 2024, the SEC finalized its climate rule voting 3-2 in favor of an 886-page rule titled “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (Climate Rule). The Climate Rule requires certain public companies to disclose Scope 1 and Scope 2 GHG emissions, if such emissions are considered material, in their annual reports and registration statements. In response to litigation filed by Liberty Energy and Nomad Proppant Services, the Fifth Circuit Court of Appeals granted a request for an administrative stay on March 15, 2024.4 The Court eventually lifted the stay and, following the SEC’s request to consolidate at least nine of the pending lawsuits, the Eighth Circuit Court of Appeals was selected via a lottery to consider the rule’s legal challenges. On April 4, 2024, the SEC voluntarily stayed the Climate Rule, pausing any implementation, pending judicial review. Cybersecurity Disclosure On July 26, 2023, the SEC adopted by a 3-2 vote rules requiring expansive new disclosures by public companies regarding cybersecurity matters.7 The final rules, entitled “Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure” (Cybersecurity Rule), include an amendment to Form 8-K that requires issuers to publicly disclose a cybersecurity incident within four business days following the company’s determination that the incident is material to the company. On December 18, 2023, the Cybersecurity Rule became effective. Rule 14a-8 Amendments On July 13, 2022, the SEC proposed amendments to Rule 14a-8(i)(12) that would impose additional restrictions on companies seeking to exclude proposals addressing substantially the same subject matter as prior proposals that received minimal support. Private Fund Adviser Rule On August 23, 2023, the SEC adopted new rules and rule amendments adding regulatory requirements on private fund advisers and updating the existing compliance rule applicable to all investment advisers. On June 5, 2024, the Fifth Circuit vacated the rule, noting that the SEC exceeded its statutory... ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=412710