SEC Investor Advocate Highlights Areas for Concern

The SEC Office of the Investor Advocate ("OIA") identified problematic investment products and practices and outlined developments in key policy areas.

In its FY 2019 Annual Report, the OIA identified several areas of concern, including: (i) the increase in popularity of reverse factoring (where a company uses an intermediary to engage in trade payable programs); (ii) dual-class share structures at corporations that allow a founder to exercise ongoing control over a company in which the founder is a minority shareholder; and (iii) the transition from LIBOR.

The OIA also outlined its activities within the following policy areas:

1. public company disclosure;

2. equity market structure;

3. fixed income market reform;

4. accounting and auditing;

5. standards of conduct for broker-dealers and investment advisers;

6. exchange-traded funds;

7. enhanced disclosure for funds and variable annuities;

8. transfer agents; and

9. the impact of Kokesh v. SEC on enforcement actions.