{"id":235504,"date":"2025-12-03T13:07:46","date_gmt":"2025-12-03T18:07:46","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=235504"},"modified":"2025-12-04T04:53:11","modified_gmt":"2025-12-04T09:53:11","slug":"the-sec-makes-some-news","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/the-sec-makes-some-news\/","title":{"rendered":"The SEC Makes Some News"},"content":{"rendered":"\n

Yesterday morning, I was privileged to attend a speech by SEC Commissioner Paul Atkins at the NYSE.  After ringing the opening bell, he offered an address entitled “Revitalizing America\u2019s Markets at 250<\/a>\u201d before a room full of a few hundred invited guests.  Subsequently, the SEC denied a series of requests from issuers to list 3X and 5X leveraged ETFs.  Both were newsworthy, though for very different reasons.  Here are my views on them (which are not necessarily those of my employer).<\/p>\n\n\n\n

After sharing a bit of economic history about the role that lower Manhattan has played in our nation\u2019s development and then offering context about the Securities Act of 1933 that created the SEC, Commissioner Atkins laid out an agenda for easing regulatory burdens upon public companies.  He stated:<\/p>\n\n\n\n

One of my priorities as Chairman is to reform the SEC\u2019s disclosure rules with two goals in mind. First, the SEC must root its disclosure requirements in the concept of financial materiality. Second, these requirements must scale with a company\u2019s size and maturity.<\/em><\/p>\n\n\n\n

Underlying those goals is a desire to make it easier for companies to go public by shrinking the amount of boilerplate disclosure that all public companies must file as part of proxy statements and the like.  The venue was particularly appropriate, since the NYSE (and Nasdaq) benefits from more companies coming to market and would rather have more IPOs to facilitate public participation in the capital raising process.  I certainly share that view. <\/p>\n\n\n\n

The difficult part about any change to regulation, however, is that there can be unintended consequences.  Much of the current disclosure that the Commissioner views as onerous began with good intentions before moving away from a high standard of materiality.  Yet it can be tricky to determine what might be material for all investors.  Sometimes there are key elements about a company\u2019s health buried in a footnote.  Efficiency should not come at the expense of transparency.<\/p>\n\n\n\n

As his talk progressed, I jotted a few hypothetical questions that I would have asked if there was a Q&A session.  (For those who saw me typing on my phone during the speech, this is why \u2013 I wasn\u2019t texting or sending emails.)  They included:<\/p>\n\n\n\n