Springtime in Washington: The SEC’s Regulatory Agenda

Autumn leaves are beginning to fall, but, on September 4, the OMB’s Office of Information and Regulatory Affairs released the Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions. In a statement, discussing the SEC’s contemplated actions included in this agenda, Chair Atkins said that the regulatory agenda “reflects that it is a new day at the Securities and Exchange Commission.”  He noted that the agenda “covers a number of envisioned deregulatory rule proposals to reduce compliance burdens and facilitate capital formation, including by simplifying pathways for raising capital and investor access to private businesses” and “discusses amending existing rules to improve and modernize them as well as address disclosure burdens.”

Twice each year, the Office of Management and Budget publishes the Unified Agenda of Regulatory and Deregulatory Actions, a listing of rulemaking activities that federal administrative agencies plan to undertake in the coming months.  These listings include a brief description of each proposed action and its timetable, along with other basic information, such as the agency’s statutory authority. The SEC’s contribution to the Spring 2025 Unified Agenda consists of 23 items, many of which relate to cryptocurrency, small company capital formation and private offerings, or securities market mechanics and oversight.  Three items, all under the responsibility of the SEC’s Division of Corporation Finance (Division), could potentially be of interest to public company audit committees:

• Rationalization of Disclosure Practices.   The Division is considering recommending that the Commission propose rule amendments to rationalize disclosure practices to facilitate material disclosure by companies and shareholders' access to that information.

• Shareholder Proposal Modernization. The Division is considering recommending that the Commission propose rule amendments to modernize the requirements of Exchange Act Rule 14a-8 [the rule that sets the parameters under which shareholder proposals must be included in the company’s proxy statement] to reduce compliance burdens for registrants and account for developments since the rule was last amended.

• Enhancement of Emerging Growth Company Accommodations and Simplification of Filer Status for Reporting Companies.  The Division is considering recommending that the Commission propose rule amendments to expand accommodations that are available for Emerging Growth Companies (defined generally to include new issuers with total annual gross revenues of less than $1.235 billion) and to rationalize filer statuses to simplify the categorization of registrants and reduce their compliance burdens.

For all three projects, the SEC’s anticipated timetable is publication of a proposal by April 2026.

Chair Atkins also observed in his statement that the agenda reflects the withdrawal of “a host of items from the last Administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority.”  In this regard, What’s in Store for the Rest of 2024?  SEC Reg Flex Agenda Update, July 2024 Update, described four projects of interest to audit committees in the Spring 2024 Unified Agenda, published during the final year of the Biden Administration.  These projects were human capital management disclosure, corporate board diversity disclosure, disclosure of payments to resource extraction issuers, and incentive-based compensation arrangements.  None of these initiatives appear on the 2025 list, and all have presumably been shelved.