SEC Commissioner Touts Best Principles of US Securities Regulation

SEC Commissioner Mark T. Uyeda highlighted principles important to the success of the US capital market and urged Southern African securities regulators to adopt and implement regulatory frameworks that strike the appropriate balance between free market economics and investor protection. He said that these measures "can contribute to the in-flow of assets into the capital markets of African nations," and "can also attract foreign capital."

In remarks at a Southern African securities regulators conference, Commissioner Uyeda argued that capital markets thrive when securities regulation focuses on (i) requiring companies seeking to raise money from the public to provide full and fair disclosure and (ii) prohibiting persons from engaging in fraud in the markets. 

The Commissioner focused on both the role of regulators in fostering capital markets, as well as the pitfalls of regulation. He emphasized that the US public company regulatory regime is strong because "disclosures are generally mandated only if they are material to investors from a financial perspective." He criticized the Dodd-Frank Act for mandating disclosures about non-financial concerns, such as on conflict minerals originating from the Democratic Republic of the Congo ("DRC") intended to "reduce conflict and violence in the region." He argued that policy decisions, such as reducing greenhouse gas emissions, or conflict and violence in the DRC, should be handled by political leaders, rather than financial regulators.  

Mr. Uyeda argued that "[s]traying from the guiding principle of financial materiality risks degrading the integrity of the capital markets and ought to be avoided." He further cautioned that "financial regulators must not be tempted by retroactively imposing rules through enforcement" and that market participants "should know the rules in advance."