U.S. SEC Provides Update For COVID-19 Response

The U.S. Securities and Exchange Commission (SEC) has updated its response to COVID-19 and the related effects on the U.S. securities markets. The organization reported that its efforts are centered, first and foremost, on the health and safety of its employees as well as all Americans. It is also now focused on the following:

  • maintaining the continuity of Commission operations
  • monitoring market functions and system risks
  • providing prompt, targeted regulatory relief and guidance to issuers, exchanges and other registrants impacted by COVID-19, including in connection with the execution of their business continuity plans (BCPs)
  • maintaining our enforcement and investor protection efforts, particularly with regard to the protection of our critical market systems and vulnerable investors

The SEC further revealed that it has now transitioned to a full telework posture with limited exceptions, with the majority of SEC staff beginning teleworking on March 10th, and through this transition, the agency has remained fully operational.

“Our experience over the course of the week of March 9 provides us confidence that the agency will continue to be able to maintain operations in a full telework posture. As with any large-scale operational shift, we expect adjustments in certain functions, including with respect to information technology, may be necessary or advisable. We encourage market participants to continue to engage with us, and we will provide operational updates as necessary.”

The organization then reported staff across divisions and offices have also expanded their ongoing outreach efforts with clearing agencies, exchanges, issuers, public accounting firms, investor representatives, credit rating agencies, fund sponsors, investment advisers, and other market participants, as well as other domestic and foreign regulators.  Key areas of ongoing focus and monitoring include:

  • Trading, Markets and Securities Infrastructure: Monitoring the functioning, integrity, and resiliency of securities markets with a focus on operations, systems integrity and BCPs of U.S. securities and derivatives clearinghouses, exchanges, other market utilities, and key market participants.
  • Large Financial Firm Monitoring: Monitoring and communicating with the largest U.S. broker-dealers to keep abreast of their activities and operations, including BCP matters and capital and liquidity.
  • Asset Management Industry: Monitoring and outreach to the asset management industry (including mutual funds, money market funds, exchange-traded funds (ETFs), private equity funds and investment advisers), particularly funds and advisers with material exposures in markets and asset classes that have been most affected by recent events.
  • Securities Market Macro Trends, Dynamics and Potential Impacts: Monitoring and analyzing real and potential effects of COVID-19 on the functioning of U.S. and global securities markets, including potential impacts and spillover effects on industry and company operations and actions taken by governmental authorities and private market participants.
  • Issuers, Corporate Disclosures and Accounting Issues: Monitoring and providing guidance with respect to corporate filings and disclosures (e.g., changes in trends and outlook, the addition or modification of risk factors and discussion of supply chain and distribution matters) of U.S. issuers, as well as foreign companies that are listed in the U.S.
  • Ongoing Coordination with U.S. and Foreign Financial Regulatory Community: Engaging in regular communication, coordination and information sharing concerning risks, trends and impacts with the Department of the Treasury, National Economic Council, Federal Reserve Board, Federal Reserve Bank of New York, FDIC, OCC and CFTC, as well as regulators in Asia and Europe, including through Chairman Clayton’s participation in the Financial Stability Board (FSB) and the Commission’s participation in the International Organization of Securities Commissions (IOSCO).

The SEC then added:

“Through this period of nationwide challenge, we have remained fully operational and committed to our tripartite mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.   While the agency is engaging on numerous COVID-19 initiatives as noted above, we also continue our regular agency operations.  For example, we have continued to advance rulemaking initiatives, conduct inspections, bring enforcement actions, and review and comment on issuer and fund filings.”

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