SEC chairman Gensler considers corporate disclosures to curb consolidation

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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler will address corporate disclosures as the Biden administration focuses on tackling anti-competitive behavior.

At a meeting of the new White House Competition Council scheduled to take place later this week, Gensler will also focus on the agency’s review of the impact of revenue models such as payment. order flow, a senior SEC official told Yahoo Finance.

The SEC is one of six independent agencies scheduled to meet with eight cabinet secretaries at the very first board meeting on Friday at 10 a.m. ET, according to people familiar with the matter. The White House announced it, aspiring to “fight overconcentration, monopolization and unfair competition.”

Gensler plans to tell the board that the SEC’s role in promoting competition will involve developing potential rules on corporate disclosures and low-cost investor access to equity capital markets.

Since joining the SEC as chairman in April, Gensler has advocated for increased transparency, particularly on climate risks and human capital. He called for mandatory and standardized disclosures amid the growing popularity of environmental, social and governance (ESG) funds.

“Investors are looking for consistent, comparable, decision-making information so that they can invest their money in companies that meet their needs,” Gensler.

SEC Mandate

Regarding specific climate risks, the agency requested and collected contributions from staff. The proposed rules could arrive in the fall, the SEC official said. Gensler also called for more disclosure on “human capital,” which would require companies to detail their workforce turnover, workplace safety and diversity, among other factors.

At Friday’s meeting, the SEC chairman also plans to highlight the agency’s work on the structure of the stock market. In the aftermath of the start of the year, the SEC said it was examining the concentration of retail order flow and the revenue models that $ 0 fee brokers and market makers rely on. The SEC hasn’t ruled it out, said.

Ensuring competition in the spirit of the new board is not directly within the mandate of the SEC; the Federal Trade Commission (FTC) is the primary agency responsible for managing antitrust law. But the SEC official said leveling the playing field in corporate disclosures, in addition to fostering competition in capital markets that lowers the cost of investment, is tied to the SEC’s mission. to “protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.”

The Competition Council does not direct the agencies to create specific rules. But those inside the DC ring road have interpreted the formation of the council as an important posture of the Biden administration on consolidation, particularly in the tech and banking sectors.

“Although the Competition Ordinance includes several specific initiatives that various agencies can adopt, much of the Competition Ordinance is quite broad and, rather than adopting specific changes, directs or encourages federal agencies to consider the development of potential rules, ”noted Davis Polk in a July 12. Remark.

The law firm added that it could take years for a rule to go through the rigorous rule-making process before finally coming into effect.

Brian Cheung is a reporter covering Fed, Economics and Banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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