Reps. McHenry, Huizenga encourage SEC reforms

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Two Republican House leaders are calling for Securities and Exchange Commission (SEC) reforms that include modernizing capital markets, promoting greater transparency, and avoiding mission creep.

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Reps. Patrick McHenry (R-NC), the Republican leader of the House Financial Services Committee, and Bill Huizenga (R-MI), the Republican leader of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, recently forwarded correspondence to the new SEC Chairman Gary Gensler outlining Republican priorities.

“As you and your fellow Commissioners work to set your agenda, we request a timely response detailing your priorities for 2021–2022,” the legislators wrote. “In developing your priorities, there are a number of important issues that are critical to fulfilling the SEC’s mission.”

The lawmakers said the SEC’s transparent rulemaking agenda is paramount to its effectiveness. Investors, issuers, market participants, financial regulators, and Congress should have a clear understanding of the Commission’s roadmap.

“We insist that the Commission ensure any changes to the Commission’s disclosure regime are consistent with the historical practice of requiring only disclosures of information that are actually material to investors,” the legislators concluded. “The Commission’s touchstone standard of materiality is one of the reasons the U.S. capital markets are the envy of the world. It would be an abuse of the Commission’s authority to stray beyond the materiality standard to achieve non-investment-related social goals, particularly when such issues are better addressed by Congress or other regulators.”

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