Audit, Compliance and Risk Blog

Securities and Exchange Commission Roundup 2013

Posted by Jon Elliott on Fri, Jan 24, 2014 the second year running, SEC activities during 2013 were dominated by its efforts to issue rules required by two major pieces of recent legislation:

  • Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) – responds to the near-collapse of the U.S. financial system by enacting hundreds of new requirements

  • Jumpstart Our Business Startups (JOBS) Act of 2012 – requires SEC to ease targeted regulatory requirements, particularly for qualifying start-ups and newly-listed companies

Between them, these two laws require massive rulemaking efforts, tending to pull in opposite directions: more regulation for some entities under Dodd-Frank, and less regulation for other entities under the JOBS Act.

During 2013, the five-member SEC experienced substantial turnover, with 3 new commissioners: chair Mary Jo White assumed office in April (after serving as a federal prosecutor and long-time private attorney), and members Michael Piwowar (coming from a series of economic and policy positions, most recently senior staff jobs to Republicans in Congress, including work on Dodd-Frank) and Kara Stein (coming from a series of senior staff jobs to Democrats in Congress, including work drafting Dodd-Frank) in August.

With those changes at the top, SEC continued to struggle to organize and apply its limited staff resources, and to respond to forceful lobbying pressures (directly to SEC, to and through Congress, and in market-related media). With these constraints, SEC met dozens of rulemaking deadlines but missed dozens of others.

Dodd-Frank Rules

  • January (effective 3/25/13) – add requirements for broker-dealers and “paying agents” to implement specified searches for lost customers, to ensure that payments are made.

  • April (effective 9/23/13) – specify disqualification of felons and other “bad actors” from offerings exempt from registration under Regulation D Rule 506 (read my earlier blog)

  • April (effective 5/20/13) – adopt joint identity theft red flag rules (with CFTC)

  • May – reopen comments for proposed rules for security-based swaps

  • May – propose rules for cross-border security-based swaps

  • July (effective 6/1/14 and later deadlines) – revise broker-dealer reporting, audit and notification requirements

  • August – re-propose rules (jointly with other financial regulators) for credit risk retention by securitizers of asset-based securities

  • September (effective 1/13/14) – establish registration requirements for municipal advisors

  • September – propose rule requiring disclosure of pay ratio between CEO and other employees (read my earlier blog)

  • (December (effective 4/1/14) – adopt rules (jointly with other financial regulators) restricting banking entity and nonbank financial company ability to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund.

JOBS Act Rules

  • April (effective 9/23/13) – create rules under which issuers can use “general advertising” and “general solicitation” and retain exemption from registration under Regulation D Rule 506 (read my earlier blog)

  • July – propose further revisions related to “general advertising” and “general solicitation”

  • October – propose “crowdfunding” rules (read my earlier blog)

  • December – propose rules for Regulation A exemptions for offerings up to $50 million

Other Laws, Court Decisions and Rules

  • February (effective 3/5/13) adjust maximum civil penalties for inflation (required every 4 years)

  • July (effective 10/21/13) - revise broker-dealer financial responsibility requirements

  • July (effective 7/16/13 – 7/31/16) - create rule for broker-dealer participation in retail foreign exchange transactions (replacing interim final rule)

  • July – Court of Appeals vacates SEC’s Resource Extractor issuer reporting rule, finding SEC misapplied its authority (read my earlier blog).

What Will 2014 Bring?

During 2014, SEC is planning to finalize the proposed rules identified above, and to propose and/or adopt additional rules required by Dodd-Frank and the JOBS Act.

Specialty Technical Publishers (STP) provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:

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About the Author Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. He was involved in developing 16 existing products, including The Complete Guide to Environmental Law and Workplace Violence Prevention.

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at:




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Tags: Corporate Governance, Business & Legal, SEC, Employer Best Practices, Accounting & Tax, Accountants, JOBS Act