Securities and Exchange Commission Chair Mary Jo White said Wednesday the agency needs to continuously adjust disclosure requirements to aid investors.
“The commission should be regularly recalibrating and updating its suite of disclosure requirements to adapt to continual changes in the marketplace. What is effective today may not be effective tomorrow,” White said.
She added the SEC should be making small adjustments to rules as well as large ones.
“All too often, when investors or issuers have difficulties, there is a call for fundamental reform. But we should also consider targeted adjustments directed at discrete problems,” she said.
One way the SEC is improving its effectiveness, said White, is by having the Division of Economic and Risk Analysis redouble its efforts to understand the impact of particular rules after they are put into place.
She acknowledged it is “notoriously difficult” to draw the connection between a specific rule and an impact on investor protection or capital formation. However, she said the effort is essential.
For example, White said the SEC is proactively assessing how rules for securities offerings are working so the agency can quickly evaluate effectiveness; detect problems; and, if need be, respond with guidance, rule changes and enforcement initiatives.
Noting the commission will be finalizing JOBS Act rules Friday, White said the earlier adoption of rules permitting general solicitation has not been accompanied by the widespread fraud that some feared would occur.
She spoke at the Practising Law Institute’s 47th Annual Institute on Securities Regulation in New York.