Acting SEC Chair Uyeda spoke at the Institute of International Bankers’ (IIB) Annual Washington DC Conference on March 11, 2025, about the U.S. Treasury markets.

Acting Chair Uyeda discussed the regulation of exchanges.  In particular, he discussed the proposed approach that the Securities and Exchange Commission had undertaken under the leadership of former Chair Clayton in proposing rules for alternative trading systems (ATS) that trade U.S. government securities.  This was contrasted with the direction taken by the Commission under Chair Gensler with its proposed rule, which would have defined an “exchange” quite broadly, and would have included various protocols used with respect to crypto assets.  Acting Chair Uyeda stated that he asked Commission Staff to engage with the Treasury Department, the Federal Reserve and other market participants in order to consider whether to move forward with changes that would narrowly address ATSs that trade U.S. government securities.  He also noted that, given the negative comments from market participants regarding aspects of the proposed rule’s definition of “exchange” and its effect on crypto related activities, he asked the Staff for alternatives to that part of the proposed rulemaking.

Acting Chair Uyeda also discussed the benefits associated with the use of central clearing for Treasury securities.  He noted that the original implementation timeline had not been sufficiently generous to allow market participants time to prepare for the changes.  The extended timeline should address these concerns.  The Acting Chair also addressed the concerns raised regarding the extraterritorial scope of the Treasury clearing rule.  In that regard, he encouraged conference attendees to “engage with the appropriate bodies here and in the country of [their] parent companies to ensure issues are identified and resolved.”  See the full text of the Acting Chair’s remarks.

On March 4, 2025, the Investment Company Institute (ICI) wrote to the Securities and Exchange Commission (SEC) to express its support of a request for co-investment exemptive relief by an applicant and urge that the SEC grant similar class relief on a go-forward basis.  In brief, Section 17(d) of the Investment Company Act of 1940, as amended (the “1940 Act”), makes it unlawful for affiliates of a fund to effect transactions in which the fund is a participant.  In its letter, the ICI stated that because of the way originated investments are negotiated and allocated across regulated funds and private funds, co-investment relief “has become a virtual necessity for managers of regulated funds investing in privately placed assets” where Section 17(d) of the 1940 Act and Rule 17d-1 could otherwise be deemed to prevent such transactions.

The ICI argues that “co-investment opportunities present significant benefits to the ability of investors to participate in diversified investments,” and the existing “cumbersome exemptive relief interferes with these benefits.”  The ICI letter states that, while granting exemptive relief to the subject applicant is a significant step in the right direction, the existing co-investment order regime is highly technical and prohibits common transactions “without any corresponding investor protection benefit,” and that modernization of the co-investment framework more broadly is long overdue.  In the related press release, the ICI notes that a principles-based co-investment framework would “provide more flexibility for retail investment products” and “remove unnecessary barriers and allow everyday Americans to better access to private markets.”  For more information, see ICI’s letter here and the related press release here.  Broader retail access to the private markets through registered funds was recently discussed during a House Financial Services Committee hearing on capital formation.  SEC Acting Chair Uyeda also noted that “consideration should also be given to changes under the 1940 Act that would permit more retail investors to invest through private funds” in a recent speech.

On March 6, 2025, the Securities and Exchange Commission (“SEC”) issued a press release relating to the enhanced Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system (“EDGAR Next”), including useful links to various guidance and resource materials to assist filers and their advisers with transition.  The SEC announced that the new EDGAR Filer Management dashboard will go live on the SEC’s website on March 24, 2025.  On that date, filers can enroll in EDGAR Next by submitting an amended Form ID, which is the application that individuals or companies complete to obtain EDGAR access credentials.

As discussed in our Legal Update, the SEC’s changes to the EDGAR system were issued on September 27, 2024.  Enrollment in EDGAR Next will remain open until December 19, 2025. The SEC stated that filers should enroll no later than September 12, 2025, to avoid interruption in the ability to file.  To avoid getting locked out from the EDGAR system close to a filing deadline, filers should provide sufficient time to transition to EDGAR Next.  More information is available on the EDGAR Next webpage.  The SEC also provided links to EDGAR Next resources, including:

See the SEC’s press release here.  For more, join the upcoming PLI presentation, led by partners Jason Parsont and Michelle Stasny.

On March 3, 2025, the Securities and Exchange Commission (SEC) announced that its newly-formed Crypto Task Force will host a series of public roundtable discussions on key areas of interest relating to the regulation of cryptocurrency assets.  Dubbed the “Spring Sprint Toward Crypto Clarity” series, the roundtables represent a changed approach at the SEC under Acting Chair Mark T. Uyeda, who is keen to establish a regulatory framework for crypto assets.

The inaugural roundtable, “How We Got Here and How We Get Out – Defining Security Status,”will be held on March 21, 2025 at the SEC’s headquarters in Washington, D.C. and will be open to the public.  The roundtable will also be streamed live on the SEC’s website, with a recording of the event posted at a later date.  Slated panelists include attorneys in the sector, academics, and industry stakeholders.  In addition to the roundtable discussion, attendees will be able to participate in small group breakout sessions that will not be broadcast.  Future roundtable scheduling and agenda information will be posted on the homepage of the Crypto Task Force on the SEC’s website.

On March 3, 2025, the Staff of the Division of Corporation Finance of the Securities and Exchange Commission (the “SEC”) announced a new policy, with immediate effect, expanding the accommodations available for issuers that submit draft registration statements for confidential review. The new enhanced accommodations:

  • expand the availability of the SEC’s confidential review process for the initial registration of a class of securities under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to include both Section 12(b) and Section 12(g) registration statements on Forms 10, 20-F, or 40-F;
  • permit issuers to submit draft registration statements regardless of how much time has passed since the issuers became subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act;
  • expand the availability of the confidential review process for a de-SPAC transaction in situations where the SPAC is the surviving entity (i.e., SPAC-on-top structure) as long as the target is eligible to submit a draft registration statement; and
  • permit issuers to omit the name of the underwriter(s) from their initial draft registration statement submissions, when otherwise required by Items 501 and 508 of Regulation S-K, provided that they include the name of the underwriter(s) in subsequent submissions and public filings.

While the new Staff policy is helpful and, we believe, a step in the right direction, the accommodations raise a number of practical and legal considerations and questions that we highlight in this Legal Update.

The Securities and Exchange Commission (the “SEC”) recently announced an upcoming roundtable discussion focused on the role of Artificial Intelligence (“AI”) in the financial industry.  Scheduled for March 27, 2025, the event will take place from 9 a.m. to 4 p.m. at the SEC’s headquarters in Washington, D.C.  It will be open to the public and offers both in-person and virtual attendance options.  The roundtable aims to foster a dialogue on the various aspects of AI, including its risks, benefits, and governance within the financial industry.

The roundtable will feature remarks from SEC Acting Chair Mark Uyeda, along with Commissioners Hester Peirce and Caroline Crenshaw.  Their insights will set the stage for a series of discussions that delve into the challenges and opportunities presented by AI technologies.  This initiative underscores the SEC’s commitment to understanding and addressing the evolving landscape of AI.  The SEC’s prior effort to address AI, in the form of the predictive data analytics proposal was met with anxiety, concern and criticism.  Ultimately, there was an acknowledgment that a modified version of the proposal would be taken under consideration.  It will be interesting to see whether the roundtable sets the stage for, or provides any insights into, a new approach.

Information on the roundtable, which will include the agenda and process for submitting public comments can be found here.  Register in advance here.

Earlier this month, the US House of Representative’s Financial Services Committee (the “Committee”) held a hearing entitled “The Future of American Capital: Strengthening Public and Private Markets by Increasing Investor Access and Facilitating Capital Formation.”  During the hearing, the Committee examined over thirty bills and is soliciting feedback from the public on these bills, as well as related measures.  A list of the bills being considered can be found here.

The Committee also posed several questions to the public covering topics related to access to capital, investor access and participation, the public market and company lifecycle and technology and artificial intelligence. 

The questions concerning public companies include the following:

  • What are the greatest challenges companies of all sizes, entrepreneurs, and fund managers face when raising capital?  What policy solutions could help?
  • The JOBS Act and other initiatives have broadened capital access.  What aspects of the JOBS Act have been most effective?  What improvements are needed?
  • Beyond traditional lending and equity finance, what alternative funding models (e.g., revenue-based financing, tokenization, secondary markets) should policymakers consider?
  • What are the biggest barriers preventing companies from going public in the United States?  How can policy reforms ease this transition from a private company to publicly traded?
  • What regulatory or market structure challenges do small public companies face?  How can they be addressed through policy reforms?
  • How should policymakers approach the changing landscape where companies stay private longer or seek non-IPO exits?  Are there ways to improve liquidity in private markets and ease pathways to public markets?

A full list of the questions can be found here.  Responses are sought by March 31, 2025.  This is an important opportunity to provide input.

The U.S. Securities and Exchange Commission’s Investor Advisory Committee (the “Committee”) will meet March 6, 2025.  During this meeting, the Committee will present its recommendations to the SEC concerning traceability issues under Section 11 of the Securities Act of 1933.  The agenda also includes a panel on Artificial Intelligence (AI)-related disclosures and another on retail investor fraud in the United States.

The first panel will explore how the SEC can standardize AI-related disclosure requirements to provide investors with useful information.  It will focus on the impact of AI on corporate operations and financial reporting.  The second panel will assess the economic impact and methods of retail investor fraud in the United States and explain how bad actors leverage AI and other technologies.

Additionally, the Committee will discuss its recommendations to the SEC regarding traceability issues under Section 11 of the Securities Act.  In 2023, in the Slack Technologies case, the Supreme Court overturned a Ninth Circuit decision, ruling that investors must prove they purchased shares directly linked to the allegedly misleading registration statement in order to file a Section 11 claim.  More recently, the Ninth Circuit Court of Appeals ruled in favor of Slack, dismissing an investor class action lawsuit brought under Sections 11 and 12(a)(2) of the Securities Act.  Read our blog post for additional details.

The Committee’s Draft Recommendations:

  1. Implement a Lockup Period for Unregistered Shares:  Recommend that the SEC introduce a lockup period for unregistered shares following an IPO to preserve investors’ ability to bring Section 11 claims. The method of implementation is left to the SEC’s discretion.  For example, the Committee suggested linking the acceleration of registration under Rule 461 or Section 8(a) to maintaining Section 11 liability.  This approach would ensure that issuers structure offerings to safeguard investors’ rights to file claims.  Additionally, the Committee proposed amending Rule 144 to require holders of unregistered shares to retain them for a specified period post-IPO, thereby reducing the impact of unregistered shares on investors’ ability to trace their holdings.
  2. Determine the Appropriate Length for the Lockup Period:  Urge the SEC to establish an appropriate duration for the lockup period by seeking public comments, considering the pros and cons of both shorter and longer timeframes.
  3. Explore Technological Solutions for Tracking Share Origins:  Recommend that the SEC consider adopting technological solutions to trace share origins more effectively, potentially offering incentives such as reduced lockup durations. The recommendation highlights distributed ledger technology as a possible solution.

Read the full agenda and the draft recommendations.

Today, the Staff of the Division of Corporation Finance of the Securities and Exchange Commission announced a new policy permitting confidential submission of registration statements in additional circumstances in order to promote capital formation.  The statement provides that

  • the nonpublic review process will be available for the initial registration of a class of securities under the Exchange Act to include both Section 12(b) and Section 12(g) registration statements on Forms 10, 20-F, or 40-F;
  • issuers will be able to submit draft registration statements regardless of how much time has passed since they became subject to the SEC reporting requirements;
  • the nonpublic review process will be available for a de-SPAC transaction in situations where the SPAC is the surviving entity (i.e., SPAC-on-top structure) as long as the target is eligible to submit a draft registration statement; and
  • issuers may omit the name of the underwriter(s) from their initial draft registration statement submissions, when otherwise required by Items 501 and 508 of Regulation S-K, provided that they include the name of the underwriter(s) in subsequent submissions and public filings.

The statement is available here.  A Legal Update will follow discussing the additional flexibility and the possible operation of these provisions.

Webinar | March 18, 2025
1:00 p.m. – 2:00 p.m. EDT
Register here.

In September 2024, the SEC adopted wide-ranging changes to how filers access and manage their accounts on EDGAR (changes collectively referred to as “EDGAR Next” by the SEC). Among other things, EDGAR Next will phase out and ultimately eliminate the EDGAR access codes that filers (and financial printers and other filing agents) currently use to log in to EDGAR and make filings. In addition, the session will cover the rules and rule amendments that provide additional flexibility in connection with documents filed with the Commission relating to the use of electronic signatures if certain requirements are met.

During this session hosted by PLI, Mayer Brown Partners Jason Parsont and Michelle Stasny will discuss:

  • Important transition dates for EDGAR Next
  • Important information for current EDGAR filers
  • Important information for new EDGAR filers
  • Account administrators, users and two-factor authentication requirements
  • The conditions for being able to use electronic signatures for EDGAR filings
  • Key takeaways, practical considerations and Q&A

To register and learn more, visit the program website.