In various prepared remarks in recent weeks, Securities and Exchange Commission (SEC) Chair Gensler has commented on a number of potential proposals for additional disclosure requirements.

In remarks made to the European Parliament Committee on Economic and Monetary Affairs, Chair Gensler addressed a number of topics, including gamification and crypto assets.  Commenting on issuer disclosures, the Chair stated that “from time to time we freshen up our disclosure regimes to reflect investor demands.”  He noted that investors increasingly seek out information regarding the climate risks, workforces, and cybersecurity risks of the companies whose stock they own or might buy.  Chair Gensler explained that the SEC Staff was working on a proposal regarding climate risk disclosure requirements.  In its consideration of these disclosure requirements, the Chair asked the Staff to consider other existing frameworks and standards, including the Task Force on Climate-related Financial Disclosures (TCFD) framework.  Relatedly, he noted the use by funds in their branding of terms like “green,” “sustainable,” “low-carbon,” and so on, and pointed out that he had directed the Staff to review current practices and consider recommendations whether fund managers should disclose the criteria and underlying data they use to market themselves in this manner.  He also pointed out that he requested that the Staff develop disclosure requirement recommendations for the SEC’s consideration regarding human capital and board diversity.  All of these items were reflected in the SEC’s regulatory agenda.

Chair Gensler also identified a new initiative—he noted that he had asked the Staff to develop a proposal for the SEC’s consideration on cybersecurity risk governance, which could address cyber hygiene and incident reporting.

Addressing the recent meeting of the SEC’s Investor Advisory Committee last week, Chair Gensler expressed appreciation for the Committee’s recommendations for additional disclosures in connection with offerings by SPACs.  He pointed out how he thought that more could be done to strengthen disclosures regarding dilution and costs to investors in the context of SPAC transactions.  The Chair noted that rulemaking recommendations were being developed to enhance disclosures and economic analysis was being undertaken to understand how investors were being benefited or disadvantaged by SPAC related transactions.

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