SEC Commissioner Hester M. Peirce advocated for a flexible regulatory approach that allows firms to experiment with new technologies and provides investors with a wider selection of investment choices.
In a speech at the Financial Planning Association 2018 Major Firms Symposium, Ms. Peirce expanded on her recent remarks discussing ways in which the SEC can "facilitate fund adaption of technological and other innovations" for the benefit of investors. To achieve this, Ms. Peirce stated, the SEC must change its approach to individual products and practices by giving firms the flexibility to utilize new technologies, products, fee structures and methods for disclosure. Such an approach, Ms. Peirce argued, would allow investors to make more informed decisions about whether and how to invest. Ms. Peirce also chided the SEC again for its refusal to allow exchanges to list products based on bitcoin, saying that it should be up to investors (not the SEC) to decide whether such investments were good deals.
Ms. Peirce stated that, in order to permit investors to be sufficiently capable of assessing new technological innovations, the SEC must ensure that disclosures are written clearly. According to Ms. Peirce, changes to fund disclosure requirements in the last decade have not always factored in investors' ability to understand the information. Fund disclosure forms are still "predominately paper-based," "voluminous and . . . overwhelm[ing]," and "riddled with legalese and technical terms." Ms. Peirce urged the SEC to consider "shorter document[ation] that contains only key information," such as is required by the 2009 mutual fund summary prospectus.