SEC’s 2022-26 Strategic Plan Focuses on Public Protection, Robust Regulatory Framework, and Diverse Workforce

The Securities and Exchange Commission’s (SEC) final 2022-26 strategic plan sets forth three primary goals that the agency hopes to accomplish over the next four years: (1) protect the investing public against fraud, manipulation, and misconduct; (2) develop and implement a robust regulatory framework that keeps pace with evolving markets, business models, and technologies; and (3) support a skilled workforce that is diverse, equitable, and inclusive and fully equipped to advance agency objectives.[1]

Upon the release of the strategic plan, SEC Chair Gary Gensler said it was “critical that the SEC continue to evolve and modernize our rulesets as technology, business models, and our markets change.”[2] Under the Government Performance and Results Modernization Act of 2010, the SEC, like other federal agencies, must release a strategic plan every four years.[3]

The SEC published its previous strategic plan in 2018, with goals to: (1) focus on the long-term interests of Main Street investors; (2) recognize significant developments and trends in evolving capital markets and adjust efforts to ensure effective allocation of resources; and (3) elevate the SEC’s performance by enhancing its analytical capabilities and human capital development.[4] Both the 2018 and 2022 strategic plans put retail investors at the forefront and underscore the interconnectedness of today’s global markets. The 2022 plan also builds on the previous version’s focus on developing the SEC’s human capital, laying out the agency’s continued emphasis on diversity, equity, and inclusion, while implementing ways for employees to work collaboratively toward a more comprehensive view of the market.

To support its goal to protect the investing public, the 2022 strategic plan cites a need to “be more vigilant than ever” and implement “consistent and efficient regulation, regardless of the entity, the technology, or the business model.”[5] The agency continues to promote the importance of disclosure to retail investors, stressing the need to “[m]odernize design, delivery, and content of disclosures so investors … can access consistent, comparable, and material information to make informed investment decisions.”[6] The plan specifically refers to the importance of disclosures related to climate risks, “cybersecurity hygiene policies,” and each organization’s people.

The plan also contemplates the need for the SEC to adapt its enforcement mechanisms to the ever-changing technology that is both creating new market risks and amplifying existing ones.[7] The SEC notes that technology has allowed entities outside the United States to enter its markets, generating the need for greater coordination with other domestic regulators and foreign counterparts.[8] The plan also notes its goal to hold responsible individuals accountable for wrongdoing. Regarding examinations, the plan further advises that it will focus on identifying key risks and violations that could impact individual investors, including those related to cybersecurity and private fund advisor conflicts of interest.

Beyond its focus on the evolution of the SEC’s regulatory tactics, the strategic plan states that the agency “will continuously work to attract, hire, develop, and retain high-quality, diverse talent.”[9] This will result in continued development of “diversity, equity, inclusion, and accessibility” at the SEC, as well as the implementation of “policies and practices that harness the lessons of the pandemic and promote effective interaction and collaboration among individuals and teams.”[10]

First released in draft form for public comment in August 2022, the strategic plan originated with input from “members of Congress and congressional committees, investors, businesses, financial market participants, academics, and other experts and stakeholders.”[11]

[1] U.S. Sec. & Exch. Comm’n, Strategic Plan, Fiscal Years 2022-26 (2022) (“SEC 2022-26 Strategic Plan”), at 6.

[2] U.S. Sec. & Exch. Comm’n, SEC Publishes FY22-26 Strategic Plan, https://www.sec.gov/news/press-release/2022-210.

[3] Id.

[4] U.S. Sec. & Exch. Comm’n, Strategic Plan, Fiscal Years 2018-2022 (2018), at 4.

[5] SEC 2022-26 Strategic Plan at 7-8.

[6] Id. at 9.

[7] Id. at 10.

[8] Id.

[9] Id. at 12.

[10] Id. at 12.

[11] Id. at 14.