The political currents that have roiled US society often are echoed in the policy choices made by the Securities and Exchange Commission.  I do not recall a time when partisanship was not part of the SEC culture, and the combination of sharpening political dialog and the SEC structure of affording two of the five directorship seats to the party not holding the Oval Office has led to some interesting and contentious rule-making.

Followers of the SEC have the ability to observe these contrary currents by examining the “legal press” over the last couple of month.  Loosening of the restrictions on raising private capital, adopted by a 3-2 Republican majority during the Trump administration, became effective last month.  At the same time, the current SEC is embracing, and being asked further to embrace, a heightened disclosure agenda which has run, historically, contrary to Republican efforts to encourage capital formation in support of American free enterprise.

It may be that this yin-yang is a beneficial dynamic.  Each “camp” advances its “agenda” but must keep a weather eye fixed on the opposing viewpoint, thereby rubbing the most controversial edges off their respective proposals.  It is hard to make an argument against reasoned rules preventing misinformation and other rules promoting full disclosure of risk, and the last few months show promise of a happy, if controversial, medium in each arena.

The next two blog posts will explore:

first, the expansion of capital formation tools that became effective March 15 by reason of actions taken by the Clayton Commission prior to the change in Federal Administration; and

second, the movement towards broader embracing of robust “ESG” disclosure.