SEC Rulemaking & Guidance

NYSE Proposal to Exempt Closed-End Funds Registered under the 1940 Act from the Requirement to Hold Annual Shareholder Meetings

In June 2024, the NYSE submitted a proposal to the SEC to amend Section 302.00 of the NYSE Listed Company Manual to exempt closed-end funds registered under the 1940 Act from the requirement to hold annual shareholder meetings.

• The NYSE rule filing is available here:
  https://www.nyse.com/publicdocs/nyse/markets/nyse/rule-filings/filings/2024/SR-NYSE-2024-35_Website_Upload.pdf

Other SEC Activities

SEC Office of the Investor Advocate Delivers Report to Congress on Objectives for Fiscal Year 2025

On June 27, 2024 the SEC’s Office of the Investor Advocate today delivered its Report to Congress on the Office’s objectives and priorities for fiscal year 2025, including: (1) Assisting investors victimized by fraud and monitoring the measurable surge in investment fraud schemes; (2) Enhancing Ombuds services to resolve questions, complaints, and concerns about the SEC and self-regulatory organizations (SROs) subject to SEC oversight; (3) Evaluating ways in which broker and adviser standards of conduct might be impacted by technological changes in the market; (4) Exploring means to increase transparency in and maintain investor access to the private markets; (5) Encouraging innovative and effective disclosure through investor testing of existing and proposed disclosures, especially those associated with complex products and private markets; and (6) Increasing investor engagement and input on matters of significance to retail investors.

• The press release and report are available here:
  https://www.sec.gov/newsroom/press-releases/2024-78

Biden Nominates Commissioner Crenshaw for a Second Term

On June 13, President Biden announced that he was nominating Commissioner Caroyn Crenshaw for a second term as an SEC Commissioner. Commissioner Crenshaw was unanimously confirmed by the U.S. Senate and sworn into office as Commissioner of the SEC on August 17, 2020.

• The White House Press Release is available here:
  https://www.whitehouse.gov/briefing-room/statements-releases/2024/06/13/president-biden-announces-key-nominees-76/

SEC Appoints Erica Y. Williams to a Second Term as PCAOB Chairperson

On June 11, 2024, the SEC announced the appointment of Erica Y. Williams to a second term as Chairperson of the Public Company Accounting Oversight Board (PCAOB) beginning on Oct. 25, 2024, and running through Oct. 24, 2029.

• The press release is available here:
  https://www.sec.gov/newsroom/press-releases/2024-71

SEC Invites Regulated Entities to Submit Self-Assessments of Diversity Policies and Practices

On June 5, 2024, the SEC commenced its biennial collection of Diversity Self-Assessment Submissions from Regulated Entities. Engaging in a self-assessment provides an opportunity for organizations to closely review their diversity and inclusion policies and practices for any strengths, opportunities, risks, and vulnerabilities. The SEC uses the collected data to assess and report on progress and trends in the diversity activities of regulated entities.

• The press release is available here:
  https://www.sec.gov/newsroom/press-releases/2024-68

Recommendation of the SEC Investor Advisory Committee regarding Financial Literacy and Investor Education

On June 6, 2024, the SEC IAC published recommendations regarding financial literacy and investor education as follows:

• Seek to Increase Funding and Staffing for Investor Education at the SEC
• Amplify the Availability and Usefulness of SEC Investor Education Materials
• Support Efforts to Prioritize High School Financial Literacy Courses
• Support Efforts to Increase Financial Literacy and Investor Education of Students at Colleges and Universities
• Require Financial Services Firms to Provide Access to Investor Education in Real
• Work with the Department of Labor to Encourage Employers to Provide Financial Education and Resources to Employees

• The recommendations and their details are available here:
  https://www.sec.gov/files/approved-iac-060624-rec-re-inv-ed.pdf

FINRA

New Options Disclosure Document

On June 18, 2024, FINRA advised member firms the Options Clearing Corporation has issued the June 2024 Options Disclosure Document (ODD). To comply with the requirements of FINRA Rule 2360(b)(11)(A)(1), firms may distribute the June 2024 ODD as follows:

• conduct a mass mailing of the June 2024 ODD to all customers approved to trade options and who have already received the ODD
• distribute the June 2024 ODD to a customer who has already received the ODD, not later than the time a customer receives a confirmation of a transaction in the category of options to which the amendment pertains.

• The June 18,2024 Information Notice is available here:
  https://www.finra.org/rules-guidance/notices/information-notice-061824

Crypto

A Message to the House of Representatives on the President’s Veto of H.J.Res. 109

On May 31, 2024, President Biden informed the House of his veto of H.J.Res 109, SEC Staff Accounting Bulletin No. 121 (SAB 121), which pertains to the accounting obligations of firms safeguarding crypto assets. According to the President, the resolution “would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues.”

• The President’s message to the House is available here:
  https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/31/a-message-to-the-house-of-representatives-on-the-presidents-veto-of-h-j-res-109/

Cybersecurity Advisory – NIST Releases Version 2.0 of its Cybersecurity Framework

On June 13, 2024, the Cyber and Analytics Unit (CAU) within FINRA’s Member Supervision program highlighted recent updates to the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) 2.0; the framework is a resource designed to help organizations manage and reduce cybersecurity risks, regardless of their degree of cybersecurity sophistication.

• The CSF 2.0 Updates are available here:
  https://www.finra.org/rules-guidance/guidance/cybersecurity-advisory-nist-releases-version-2-cybersecurity-framework

Cybersecurity Advisory – SEC Amends Regulation S-P Enhancing Protection of Customer Information (Exchange Act Release No. 35193)

On June 6, 2024, the Cyber and Analytics Unit (CAU) within FINRA’s Member Supervision program highlighted recent SEC amendments to Regulation S-P: on May 15, 2024, the SEC announced the adoption of amendments designed to modernize and enhance the protection of consumer financial information by broadening the scope of information covered by Regulation S-P requirements.

• The recent amendments are available here:
  https://www.finra.org/rules-guidance/guidance/cybersecurity-advisory-sec-amends-regulation-s-p

Retirement

US Department of Labor Issues Report to Congress on Considerations for Defined Benefit Pension Plan Fiduciaries Choosing an Annuity Provider

On June 24, 2024, the DOL Employee Benefits Security Administration (EBSA) issued a report to Congress on an interpretive bulletin related to fiduciary standards when selecting an annuity provider for a defined benefit pension plan.

• The press release is available here:
  https://www.dol.gov/newsroom/releases/ebsa/ebsa20240624