SEC Rulemaking & Guidance

SEC Adopts Public Company Climate-Related Disclosure Rules

On March 6, the SEC announced the adoption of “The Enhancement and Standardization of Climate-Related Disclosures for Investors” rules that apply to public companies. “These final rules build on past requirements by mandating material climate risk disclosures by public companies and in public offerings,” said SEC Chair Gary Gensler. “The rules will provide investors with consistent, comparable and decision-useful information, and issuers with clear reporting requirements.”

Compliance Date:Phased in for all registrants, with the compliance date dependent on the registrant’s filer status.

The press release, fact sheet and adopting release are available here.

Note:As of the date of this publication, there are multiple court challenges to the final rule.

SEC Adopts Rules for the Disclosure of Order Execution Information for National Market System Stocks

On March 6, the SEC announced the adoption of rule amendments that update the disclosure required under Rule 605 of Regulation NMS for order executions in national market system stocks, which are stocks listed on a national securities exchange. The final amendments expand the scope of entities subject to Rule 605, modify the categorization and content of order information required to be reported under the rule, and require reporting entities to produce a summary report of execution quality.

Compliance Date:18 months after the effective date.

The press release, fact sheet and adopting release are available here.

Repeal of SEC Proxy Advisor Rule

On February 23, the US District Court for the District of Columbia vacated the SEC’s Proxy Advisor Rule. The court ruled that the SEC “acted contrary to law and in excess of statutory authority when it amended the proxy rules’ definition of ‘solicit’ and ‘solicitation’ to include proxy voting advice for a fee.” As of the date of this publication, the SEC has not appealed the decision.

The Court’s opinion is available here.

Other SEC Activities

SEC Investor Advisory Committee (IAC) - March Meeting

On March 7, the SEC’s IAC held its March meeting. The meeting included two panels: “Discussing the U.S. Securities and Exchange Commission's Proposals to Improve Equity Market Structure” and “Examining the use of Materiality as a Disclosure Standard — Can the Definition be Improved to Better Serve Investors?” The Committee also discussed a recommendation regarding digital engagement practices.

The meeting agenda and materials are available here.

SEC Small Business Capital Formation Advisory Committee – February Meeting

The SEC Small Business Capital Formation Advisory Committee held a meeting on February 27. The meeting discussion included the Accredited Investor Definition and the State of the IPO Market.

The meeting materials are available here.

SEC Reminder: Confirm Accurate Internal Links in EDGAR Filings

On March 21, the SEC reminded filers “to confirm that internal links in their EDGAR filings are working properly prior to submitting the filings on EDGAR.” And that “filers should check whether existing filings have broken internal links and fix any such links.”

The announcement is available here.

FINRA

FINRA Adopts New Rule 6151 - Disclosure of Order Routing Information for NMS Securities

On February 26, FINRA announced the adoption of Rule 6151. Rule 61510 requires members to submit the order routing reports required under SEC Rule 606(a) (Rule 606(a) Reports) to FINRA for centralized publication.

Compliance Date:These amendments will take effect on June 30, 2024; members will be required to submit their Q2 2024 Rule 606(a) Reports to FINRA no later than July 31, 2024.

The regulatory notice is available here.

An Evolving Landscape: Generative AI and Large Language Models in the Financial Industry (PODCAST)

On March 5, FINRA hosted a podcast, “An Evolving Landscape: Generative AI and Large Language Models in the Financial Industry.” The podcast featured three FINRA experts who are closely looking at these technologies and following developments in the space.

The podcast is available here.

Retirement

DOL Appoints New ERISA Advisory Council Members

On March 5, the DOL announced the appointment of five new members and leadership for the 2024 Advisory Council on Employee Welfare and Pension Benefit Plans, also known as the ERISA Advisory Council. The 15-member council provides advice on policies and regulations affecting employee benefit plans governed by the Employee Retirement Income Security Act of 1974.

• The DOL news release is available here.
• The council’s first meeting for 2024 will be held on Tuesday, May 14, 2024.
• More information about the ERISA Advisory Council, including the reports of the 2023 ERISA Advisory Council, can be found on the council web page.

Cybersecurity

NIST Releases Version 2.0 of Landmark Cybersecurity Framework

On February 26, the NIST announced it has finalized the framework’s first major update since its creation in 2014. NIST’s cybersecurity framework (CSF) now explicitly aims to help all organizations — not just those in critical infrastructure, its original target audience — to manage and reduce risks.

The announcement is available here.