What are the implications of SEC’s strategic plan?


The US Securities and Exchange Commission has recently outlined its three-year strategic plan for fiscal 2022-2026. What will the plan involve?

ACA Global – who recently explained the plan in greater detail – said, “The Strategic Plan is by nature very broad, covering the wide variety of elements that make up what the SEC does, from mutual funds to private funds, public and privately offered securities disclosures and from broker-dealers to registered investment advisers and enforcement of anti-fraud provisions.”

The three goals the SEC will prioritise are protecting working families and investors in America’s markets, maintaining a robust and relevant regulatory framework and supporting a skilled and diverse workforce.

ACA said, “Although the three goals do not solely focus on cybersecurity, the draft Fiscal Year 2022-26 Strategic Plan reinforces the SEC’s continued focus on cybersecurity risk and highlights key technological initiatives that the SEC will monitor for potential rulemaking in the future.”

The company highlighted that the strategic plan has a few implication for cyber and tech professionals to be aware, which include that the SEC continues to view cybersecurity as a key risk to mitigate. In addition, the increased use of and reliance on technology has introduced new capital market risks for investors.

The SEC – in response to frequent investor requests for more information on cybersecurity policies – is working to modernise its disclosure systems to provide more relevant information to investors to allow for better informed investor decisions. It will also continue to update its regulatory framework to remain up to date with changes in technology.

ACA remarked, “Building a robust regulatory and technological framework is paramount to the security of the market system. The SEC will consider updating existing rules and regulations to accommodate for shifts in the technological space as well as encourage businesses to optimize their resiliency frameworks to be proactive when potential future regulatory requirements go into effect.”

The SEC has recongised it needs to regularly improve how it uses tech and data analytics to ‘surveil the markets, promote competition and enforce the law’. One of the SEC’s goals in this plan is to better arm the Divisions of Enforcement and Examinations with data to determine which firms should be examined, what they should be examined for, and to determine if there are any issues in the examined firm.

ACA concluded, “Firms should look to incorporate technology into their processes to keep pace with the SEC, confirm they are in compliance with regulatory requirements, and provide the necessary information to the regulator to prove their compliance.”

Read the full post here.

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