The SEC’s 2019 fall agenda of its rulemaking actions under the Regulatory Flexibility Act (RFA) has been posted. The agenda, commonly referred to as the “Reg Flex Agenda,” is published semiannually and reflects the actions the Chairman anticipates the SEC will complete in the short term (within a year) and the long term (longer than a year). As you may recall, Chairman Jay Clayton reduced the number of agenda items roughly two years ago in hopes that the agenda would be viewed more as a transparency and accountability tool of the agency’s initiatives, as opposed to merely aspirational goals.
The RFA mandates that each federal agency semiannually publish in the Federal Register an agenda identifying rules that the agency expects to consider in the next 12 months that are likely to have a significant economic impact on a substantial number of small entities. The RFA expressly states that an agency is not required to consider or act on any agenda item. In fact, an agency may also consider or act on items that are not included on the agenda. Lastly, the SEC Reg Flex Agenda reflects solely the priorities of the Chairman as of August 7, 2019, when originally compiled by SEC staff and does not necessarily reflect the position of any other Commissioner.
The 2019 fall Reg Flex Agenda includes a couple of new notable items, which the SEC intends to complete within the year and appear for the first time on the agenda, such as (1) proposing amendments to the Form 13F filer threshold that relate to certain institutional investment managers who must disclose their security holdings; and (2) proposing amendments to the auditor independence rules.
Also notable is that the potential rulemaking with regard to clawbacks and earnings release/quarterly reports has moved to the short-term agenda; formerly these were on the 2019 spring long-term agenda. The 2019 fall long-term agenda continues to include universal proxies, corporate board diversity, conflict mineral amendments, pay versus performance and proxy process amendments (a.k.a. “proxy plumbing”). Lastly, the 2019 fall long-term agenda adds a proposal that the SEC released in October 2010 to amend Form N-X and require certain institutional investment managers to disclose their proxy voting records on executive compensation-related matters such as say on pay, say-on-pay frequency vote and golden parachutes.
Given that the agenda solely reflects the views of the Chairman, the agenda will undoubtedly change if a new administration takes office as a result of the upcoming 2020 election.