Proposed Rules 

SEC proposes to make certain IEX-listed securities exempt from state law registration. The SEC proposed to amend Rule 146 under Section 18 of the Securities Act to designate certain securities listed on Investors Exchange LLC as covered securities for purposes of Section 18(b), which would exempt those securities from state law registration requirements. Comments are due on or before August 21, 2017. (7/14/2017) SEC proposed rule. 


Investment company reporting modernization frequently asked questions. Division of Investment Management staff prepared responses to questions related to the investment company reporting modernization reforms adopted in October 2016.

Selected Enforcement Actions

Corporate counsel charged with fraud. The SEC announced charges against an attorney who served as a director and corporate counsel of a public company for making false and misleading statements in the company’s corporate filings. The SEC alleged that the attorney negotiated the sale of all of the company’s outstanding stock, including both restricted and previously registered shares that were purportedly “free trading,” to an acquaintance interested in purchasing shell companies. The attorney allegedly misrepresented in the company’s corporate filings that the purportedly free-trading shares had not been purchased by the acquaintance, creating the false impression that those shares remained immediately available for public resale. The company later resold 14 million shares to the public in an illegal unregistered distribution for proceeds of US$34 million. The attorney consented to the entry of a cease-and-desist order, an officer-and-director bar, and an order barring him from practicing before the SEC as an attorney. An administrative law judge will conduct additional proceedings to determine whether to impose any monetary sanctions against the attorney, who also faces charges in a parallel criminal proceeding. (7/19/2017) In the Matter of David Lubin, SEC Release No. 34-81172. 

Speeches and Statements

Piwowar highlights SEC’s renewed emphasis on capital formation at Heritage Foundation event. Crowdfund Insider summarized the remarks delivered by SEC Commissioner Michael S. Piwowar at a Heritage Foundation event on July 17, 2017, during which Piwowar discussed the SEC’s renewed focus on capital formation, the high cost of disclosures for public companies, and the potential for Fintech to transform capital markets. (7/20/2017) 

Jay Clayton shows support for reducing disclosure rules and compliance costsSEC Chairman Jay Clayton delivered a speech at the Economic Club of New York during which he signaled his support for reducing the range and extent of disclosure rules and compliance costs imposed on public companies, in an effort to tempt more corporations to list on the stock market. (7/12/2017) Reuters.

Kara M. Stein delivers speech at Healthy Market Structure Conference. SEC Commissioner Kara M. Stein delivered a speech entitled, “Lighting Our Capital Markets,” at Boston’s Healthy Market Structure Conference. (7/11/2017)

Other Developments

Federal financial regulators announce coordinated review of certain foreign funds under Volcker Rule. The SEC, along with four other federal financial regulatory agencies, announced that they are coordinating their respective reviews of the treatment of certain foreign funds under the Volcker Rule and the agencies’ implementing regulations. The agencies are considering amendments to the implementing regulations to address circumstances in which the funds, which are excluded from the definition of “covered fund” under the implementing regulations, can nonetheless become subject to regulation under the Volcker rule because of governance arrangements with or investments by a foreign bank. (7/21/2017) SEC press release. 

SEC’s revised regulatory agenda excludes several Dodd-Frank mandates. The Hill reported that The White House Office of Management and Budget published the semi-annual Unified Regulatory Agenda, including an updated rule list for the SEC. (7/20/2017) Law360 noted that the SEC has eliminated several Dodd-Frank mandated rules from its agenda, including several related to executive compensation disclosure and clawbacks. (7/21/2017) 

SEC seeks comments on PCAOB’s proposed rules on the auditor’s report. The SEC requested comments on the proposed rules filed by the Public Company Accounting Oversight Board that would require the auditor’s report to include additional information, including the disclosure of critical audit matters communicated to the audit committee and auditor tenure. Comments are due within 21 days of publication in the Federal Register, which is expected shortly. (7/21/2017) SEC Release No. 34-81187. 

OIG completes audit of OCIE’s investment adviser exam completion process. The SEC’s Office of the Inspector General issued a report that contains the results of its audit of the Office of Compliance Inspections and Examinations’ investment adviser examination completion process. (7/21/2017) OIG report. 

Money market fund statistics. The SEC’s Division of Investment Management updated its money market fund statistics to include data as of June 30, 2017. (7/21/2017) Money market fund statistics. 

Revised report on potential expansion of CAT. The SEC’s Division of Trading and Markets released an amended version of a report prepared by Consolidated Audit Trail Plan participants that explains how participants could incorporate into the consolidated audit trail, information regarding equity securities that are not NMS Securities or OTC Equity Securities. (7/19/2017) Expansion report. 

Staff announcements. The SEC announced that Bryan Wood has been appointed to the role of Director of the SEC’s Office of Legislative and Intergovernmental Affairs. (7/24/2017) Christopher R. Hetner will continue to serve as Senior Advisor to SEC Chairman Jay Clayton for Cybersecurity Policy. (7/18/2017) 

Information for EDGAR filers. The SEC upgraded its EDGAR system with amendments to the following documents: EDGAR® Filer Manual Volume I (Version 28)EDGAR® Filer Manual Volume II (Version 42)Draft EDGAR® Form N-PORT XML Technical Specification (Version 1)Draft EDGAR® Form N-CEN XML Technical Specification (Version 1)EDGAR® Form CFPORTAL XML Technical Specification (Version 1.2)EDGAR® Form 17-H XML Technical Specification (Version 1.1)EDGARLink® Online XML Technical Specification (Version 20)EDGAR® ABS XML Technical Specification (Version 1.7); and EDGAR® Form D XML Technical Specification. (7/17/2017)

Private funds statistics published. The Division of Investment Management published its Private Funds Statistics for Fourth Calendar Quarter 2016. (7/14/2017)