Securities Regulation Daily Commissioner Jackson outlines priorities at SEC Speaks
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Tuesday, April 9, 2019

Commissioner Jackson outlines priorities at SEC Speaks

By Amanda Maine, J.D.

Jackson said he would like to see the Commission revisit current insider trading law and rules regarding Form 8-K disclosure timeframes.

During remarks at this year’s PLI SEC Speaks conference in Washington, D.C., SEC Commissioner Robert Jackson discussed the Commission’s recent efforts, including proposing a new broker-dealer standard and issuing advice for companies on cybersecurity disclosures.

Top issues. Jackson began his remarks by singling out a few issues that the Commission is working on. He said that it was important that the Commission stepped forward to put forth the proposal for Regulation Best Interest. He reiterated, however, that while he did vote for it and that it is a good first step, there needs to be significant changes before the rule becomes final. The Commission needs to clarify the standard as to exactly the obligations the broker owes to the customer. The obligation of the broker should be to put the client’s interests first, he said. Jackson also said that he wants to either limit or ban compensation practices that lead brokers to engage in conflicted activities. Fundamentally, the new broker standard can and should be a bipartisan effort by the Commission, Jackson added, noting that since the rule will probably be litigated for years, the Commission should speak with one voice.

Two other issues of importance to the Commission are market equity structure and the proxy process, he said. He praised former Commissioner Daniel Gallagher, who was attending SEC Speaks as a commentator, stating that he had taken up the mantle of market equity issues from him. Regarding proxies, Jackson said he found it astonishing that an American investor who casts a vote in a corporate election is not entitled to know, and it is very difficult to find out, whether his or her vote was counted at all. He is hopeful for Commission action on the issue in 2019 under the leadership of his fellow Commissioner Elad Roisman, who has been tasked with taking the lead on proxy issues.

Cybersecurity. Jackson said that there is no issue that he has heard more about than cybersecurity. In fact, his first vote as a commissioner was on the SEC’s cybersecurity disclosure guidance, he observed. Jackson pointed out that he supported the guidance, but he renewed his call for the Commission to do more to encourage companies to disclose cybersecurity breaches. He acknowledged that writing such a rule would not be easy and urged the marketplace to let the Commission know if they need more guidance.

Q&A. Jackson also engaged in an impromptu question-and-answer session led by Enforcement Division Co-Director Stephanie Avakian. She asked him what he is most proud of during his tenure at the Commission so far. Jackson talked up the Reg BI proposal, which he said was 30 years in the making. Regardless of your views on the proposal, it is important that it is now out there, he said. He also praised the Commission’s work on addressing equity market structure issues, in particular the efforts of Chairman Jay Clayton and Division of Trading and Markets Director Brett Redfearn.

Avakian inquired what Jackson hopes to accomplish in the coming years at the SEC. Jackson replied that he’d like the Commission to take a look at insider trading law and how it fits the market today. He said that the common law on insider trading has served the SEC well, but it is time not to jettison it, but perhaps to revisit it.

Jackson would also like to take a closer look at the SEC’s disclosure rules. He noted that when the SEC was originally considering Form 8-K disclosures, it initially proposed a 48-hour rule while ultimately adopting a four-business-day rule. Whether this is something that still works in 2019 should be reexamined, he said.

A member of the audience asked about Jackson’s thoughts on robo-advisers. He said that while advances in technology that can help the marketplace move towards a lower-cost model for participating in the economy can be good, it’s not a solution. He advised that algorithms are still written by people who have all the same flaws that human advisers have. He added that a lot of people in this country want and need a face-to-face conversation about their financial future. It is not something that can be "innovated away," according to Jackson.

MainStory: TopStory BrokerDealers CyberPrivacyFeed DataBreach ExchangesMarketRegulation FraudManipulation Proxies SECNewsSpeeches

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