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SEC Officials Urge AMAC to Recommend Operational Changes in Light of Pandemic

Steven.Lofchie@cwt.com's picture
Commentary by Steven Lofchie

SEC Chair Jay Clayton and Commissioner Hester M. Peirce encouraged members of the Asset Management Advisory Committee ("AMAC") to provide recommendations on operational requirements in light of the lessons learned from the COVID-19 pandemic.

SEC Chair Jay Clayton emphasized the substantial operational adjustments that asset managers and market participants had made in order to facilitate business continuity in the face of the various quarantine measures. Mr. Clayton pointed to the shift to electronic delivery of regulatory documents, which he noted the SEC permitted through targeted, conditional and temporary relief. Mr. Clayton stated that the operational changes necessary to adapt to the COVID-19 pandemic underscored the necessity of the SEC updating its guidance for funds and advisers to enable them to use electronic delivery more easily, while also ensuring that paper delivery remains a viable delivery method.

SEC Commissioner Hester M. Peirce also noted the success of asset managers and market participants in adjusting their business practices in response to the pandemic. Ms. Peirce advocated for regulatory updates as opposed to "ad hoc" responses in order to adequately address technological advancements as they impact the operations of asset managers.

Both Commissioners encouraged AMAC to provide recommendations on applying the "lessons" from the pandemic regarding the electronic delivery of documents, remote operations and dematerialization.

Commentary

It is now generally understood that even if the virus were to disappear tomorrow, the work world would not return to its pre-COVID 19 state. Many workers have discovered that they can do their jobs successfully without going to the office five days a week; many businesses have discovered they don't need quite so much expensive real estate. The question now is how quickly will the SEC acknowledge that reality?

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