Jay Clayton is Chairman of the U.S. Securities and Exchange Commission. This post is based on Chairman Clayton’s recent remarks at the PLI 49th Annual Institute on Securities Regulation. The views expressed in this post are those of Mr. Clayton and do not necessarily reflect those of the Securities and Exchange Commission or its staff.
My remarks will focus on governance and transparency. These issues are, of course, related. Among its many benefits, transparency facilitates effective governance. My first topic will be transparency with respect to the operations of the Securities and Exchange Commission (the “SEC” or the “Commission”). Then I will turn to transparency in our securities markets—or said another way, how we can reduce opacity and, thereby, enhance our efforts to deter, mitigate, and eliminate fraud.
Commission Governance—The SEC’s Agenda
Rulemaking is a key function of the Commission. And, when we are setting the rules for the securities markets, there are many rules we, the SEC, must follow. The most well-known is the Administrative Procedure Act, or the APA. Another statute—a transparency-oriented one—is the Regulatory Flexibility Act, or the RFA. The goal of the RFA is to fit regulatory and informational requirements to the scale of businesses. That objective—in two words, regulatory proportionality—rings true with me. Under the RFA, federal agencies must “prepare an agenda of all regulations under development or review.” The agenda then distinguishes between rulemakings to be accomplished in the near-term—one-year—and the long-term—more than a year.
