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Five key SEC priorities in 2024

What public companies, boards and investors should watch for this year.

In brief
  • The SEC will continue its robust rulemaking agenda, including on disclosures, shareholder proposals and private issuers.
  • An active enforcement program will remain one of the SEC’s key pillars, with a continued focus on high impact cases to deter future wrongdoing.
  • The SEC is expected to continue to draw on its existing authorities to address the role of crypto assets and AI in the capital markets.

Under the leadership of Chair Gary Gensler, the Securities Exchange Commission (SEC or Commission) has pursued a robust agenda touching all corners of the US capital markets; this agenda is expected to continue and perhaps accelerate in the year ahead. Gensler’s stated priorities have included promoting transparency, comparability and consistency in the markets and adapting SEC regulation to evolving markets, technologies and investor needs.

SEC top five: what public companies, boards and investors should watch for in 2024

SEC rulemaking is a primary tool through which Gensler has sought to address these priorities. In 2023, the SEC finalized more rules than were proposed for the first time under Gensler’s tenure, bringing new requirements in areas ranging from cybersecurity disclosures to US Treasury securities clearing to private fund transparency. The SEC plans to finalize a number of rules in 2024 as well, as reflected in its recently updated rulemaking agenda.ᶦ This includes potential rulemakings that would impact disclosures, shareholder proposals and private issuers.


SEC rulemaking has attracted both support and criticism from capital market stakeholders. In 2023, many of the final rules were approved by a nonunanimous Commission vote, and several rules have been challenged in court. For 2024, litigation will create some uncertainty as market participants seek to implement new rules. In addition, the impending US elections and planned SEC activity in high-profile areas, such as rulemaking on climate-related disclosures, mean that stakeholder engagement — including from lawmakers, market participants and investor groups — may increase.


The SEC priorities for 2024 also include technology-related topics. The SEC is expected to continue to take steps to address the role of new technologies in the capital markets, including crypto assets and artificial intelligence (AI), drawing on all of the agency’s tools.


An active enforcement program also will continue to be a hallmark of the Gensler SEC, which includes a heightened focus on gatekeepers. As reported in November, the SEC enforcement program last year brought actions against market participants and imposed financial penalties in numbers higher than for most recent years.


Below we explore five areas of SEC activity in 2024 that may be of interest to investors, board members and issuers: disclosure rulemaking, shareholder proposals, private company rulemaking, technology and enforcement. Given the extent of SEC-related activity in these and other areas, market participants should consider closely monitoring developments throughout the year.


Chapter 1

Disclosure rulemaking

The SEC’s disclosure rulemaking seeks to meet evolving investor needs and increase transparency and comparability.

The SEC’s disclosure rulemaking under Gensler seeks to increase the types of information available to meet evolving investor needs as well as to increase transparency and comparability. These objectives have been welcomed by many, particularly in the investor community, although some others have expressed concern about the extent, cost and feasibility of the proposals. Certain stakeholders also have raised concerns about the process followed by the SEC to propose and incorporate feedback from the public on rule proposals, including “too-short” comment periods. Some market participants also have expressed concern about overlapping rule proposals issued at different times, making it hard to provide input on the collective impact of the proposals. The Commission has sought to address process concerns by, for example, making sure that market participants have at least 45 days to provide comments on rule proposals and reopening comment periods when a subsequent rule proposal or other development could impact commenters’ views on an earlier rulemaking.

Expected activity in 2024: Final rules

Climate: In 2024, the SEC is expected to finalize perhaps its most highly anticipated rule under Gensler’s leadership, which would require public companies to disclose climate-related information. The proposal seeks to enhance and standardize disclosures that public companies make about climate-related risks, their climate-related targets and goals, their greenhouse gas (GHG) emissions, and how the board of directors and management oversee climate-related risks. The proposal would also require companies to quantify the effects of certain climate-related events and transition activities in their audited financial statements. In discussing the proposal, Gensler has noted that many companies already provide — and investors use — this type of information.

Public comments on the proposal show significant support for certain mandatory climate-related disclosures. However, perspectives differ drastically on some specific elements of the proposal, such as the disclosure of Scope 3 GHG emissions (defined as all indirect emissions in a company’s value chain not included in Scope 1 or Scope 2 emissions),ᶦᶦ financial statement disclosure and the time frame for implementation. Republican Commissioners Hester Peirce and Mark Uyeda have voiced concerns about the proposal, including that it is overly prescriptive and would require disclosure of immaterial information. They also have challenged whether the proposal would provide benefits, such as comparable, consistent and reliable disclosures. Gensler has indicated that the SEC staff is seeking to address concerns raised by commenters and members of Congress, including how to shield small businesses from being indirectly subject to the proposal’s Scope 3 GHG disclosures because of their work with public companies.

According to the SEC Regulatory Flexibility Agenda, the final rule is expected to be considered by April 2024. The date has been moved on several occasions, though, so this timing is uncertain. In the meantime, the SEC staff is expected to continue to ask questions about issuers’ climate-related disclosures in comment letters to issuers along the lines of the staff’s sample comment letter.

California and EU climate disclosure rules

California and the European Union (EU) are two jurisdictions that have already finalized climate-related disclosure legislation that is expected to impact many US companies. In both cases, the related requirements will begin to take effect after a period of rulemaking to implement the legislation. The California and EU requirements are similar to some of those proposed by the SEC but also contain important differences. It is not yet clear whether the California and EU legislation will impact the SEC’s rulemaking process.


In January 2024 the SEC finalized disclosure rules for special purpose acquisition companies (SPACs). In discussing the final rule, Gensler stated that SPACs function as alternative initial public offerings (IPOs) and that the final rule is intended to provide the same investor protections available for a traditional IPO. For example, the final rule removes the safe harbor protections for projections and other forward-looking information. The final rule requires new disclosures when a SPAC conducts an IPO and when it combines with a private operating company in what is known as a de-SPAC transaction, among other changes. The disclosures include information about SPAC sponsor compensation, conflicts of interest, shareholder dilution and the target company.

Expected activity in 2024: Proposed rules

Notable actions in 2023


Chapter 2

Shareholder proposals

SEC shareholder proposals and the proxy process have been priorities for the investor community but generally opposed by issuers.

During Gensler’s tenure, the SEC has taken several actions relating to shareholder proposals and the proxy process that have been priorities for the investor community but generally opposed by issuers. These actions include finalization of a universal proxy rule, modification of rules that apply to proxy advisory firms and changes to a staff legal bulletin on whether certain shareholder proposals can be excluded from proxy statements under Rule 14a-8. In 2024, the SEC plans to finalize a rule on shareholder proposals and faces litigation relating to its proxy advisory rule.


Chapter 3

Potential rulemaking impacting private companies

Private company exemptions from most disclosure requirements have sparked debate among SEC commissioners and other stakeholders.

A topic that may become more active in 2024 relates to private companies. The securities laws provide exemptions from most disclosure requirements to companies if they meet certain thresholds relating to the number and financial sophistication of their shareholders. One aim of the exemptions is to help smaller, higher-risk companies raise capital from parties that can understand and bear that risk.

In recent years, the number and size of companies taking advantage of these exemptions has increased, and the amount of money flowing into private capital markets now greatly exceeds that going into public markets. This has sparked debate among commissioners and other stakeholders about whether the exemptions appropriately balance the investor protections and transparency available in the public capital market vs. the potential for higher investment returns and innovation in the private capital market. Expressing the view that more investor protection is needed, Democratic Commissioner Caroline Crenshaw has stated, “Increasing access to certain investments should not come at the expense of decreasing the basic investment protections that should be available to all investors.” Commissioner Peirce has supported maintaining or expanding the exemptions, saying, “Enhanced access to private capital is a positive development not only for companies, but for investors. Having a robust private market contributes to the health of our economy, and we should not look to impose public-market-style regulations on private markets. We instead should look for ways to reduce the costs companies face in going and staying public.”

Expected activity in 2024:

The SEC has two rule proposals on its agenda for 2024 that would impact private companies by changing the thresholds for companies to qualify for exemptions from registration with the SEC and its disclosure rules. The proposals would do this by revising certain definitions. One rule proposal would amend the “held of record” definition for purposes of the Securities Exchange Act of 1934. The other would modify Regulation D, including the definition of “accredited investor.” SEC officials have not provided recent views on what these rules could look like, although the SEC staff sought public input on possible changes to the accredited investor definition in a December 2023 research report, which could help shape how proposed rules are drafted. The SEC’s Investor Advisory and Small Business Capital Formation committees also discussed the exemptions in 2023 and may provide recommendations to the Commission on next steps.

Notable actions in 2023:

In 2023, the Commission increased transparency requirements for private funds and advisers, another set of market participants that had been largely exempt from SEC disclosures. One of these rules requires new current reporting by large hedge fund advisers and advisers to private equity funds of events that cause significant stress, among other information. Another final rule requires private fund advisors to provide investors with quarterly statements detailing information about private fund performance, fees and expenses. It also prohibits private fund advisors from providing preferential treatment to certain clients unless disclosed. The Fifth Circuit Court of Appeals is considering a petition filed by several industry groups to halt this rule on the grounds that the SEC acted arbitrarily and capriciously and exceeded its authority in requiring this information.ᵛ


Chapter 4


Chair Gensler has articulated the need for the SEC to keep up with the role of new technologies in the capital markets.

Chair Gensler has asserted that the use of technologies, such as crypto assets and AI, should be governed by existing securities laws and regulations, rather than requiring a separate regulatory framework. We expect this approach to continue into 2024.


Crypto assets

Since taking the chair’s seat, Gensler has asserted that most digital assets are securities and should be treated in the same way under US laws and regulations. In December 2023, the SEC affirmed that approach by voting to deny a rulemaking petition from crypto market participants to establish a regulatory framework specifically for crypto assets. In the letter communicating the decision, the SEC disagreed with the petitioner’s assertion that the current securities regulatory framework is unworkable for crypto assets and pointed to SEC rulemakings that apply to crypto assets and other market participants. The decision, as well as Gensler’s accompanying statement, also highlighted the importance of SEC discretion over its rulemaking priorities. Commissioners Peirce and Uyeda disagreed with this position, arguing instead for the SEC to hold public roundtables and otherwise collect public input to have more information to determine the SEC’s approach. Gensler also has not hidden his negative views about crypto assets. While Gensler voted with Peirce and Uyeda to approve some spot bitcoin exchange traded products (ETPs) in January 2024, his accompanying statement highlighted potential risks: “While [the Commission] approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”


Expected activity in 2024:

The SEC is planning to address crypto assets in final amendments to a rule on safeguarding advisory client assets by April 2024. This rule, aimed at preventing client assets from being stolen or lost through bankruptcy of an investment adviser, addresses all types of assets held by an investment advisor and contains explicit provisions on how an investment adviser should protect client crypto assets in its custody. In his related statement, Gensler noted that many crypto assets already were covered by the existing rule and that the proposal seeks to make sure all crypto assets are covered.


The Third Circuit Court of Appeals may review the SEC’s rejection of the rulemaking petition to establish a crypto asset regulatory framework mentioned above, which the petitioners have challenged in court.ᵛᶦ


Going into 2024, the SEC also is expected to maintain its enforcement focus on matters related to crypto assets. (See the section “Enforcement” for additional details.)



The SEC approach to AI may intensify in 2024 as the use and impacts of AI grow more widespread. Gensler has called AI “the most transformative technology of our time,” referring to both its opportunities and risks. In recent months, he has increasingly called attention to the latter, such as hidden biases in AI used by market participants, opportunities for fraud, and loss of privacy and intellectual property. More broadly, he expressed concern about AI as a potential threat to financial stability. He also stated that these issues “are not necessarily new to AI but are accentuated by it,” suggesting that the SEC may not seek to address AI on a stand-alone basis.


Expected activity in 2024:

Looking ahead, the SEC is expected to approach AI in several ways in 2024. Gensler has signaled that SEC staff will scrutinize the accuracy of company disclosures relating to AI use and has warned companies not to “AI wash” by making untrue claims about their use of AI to raise their profiles.ᵛᶦᶦ In addition, the SEC Division of Examination plans to look at the use of AI by the entities it examines. In 2023, the division reportedly conducted sweeps of investment advisers and private funds to gather information about their use of AI, which could be used to consider future guidance or rulemaking.ᵛᶦᶦᶦ


The SEC also plans to finalize a rule proposed in July 2023 that is intended to address conflicts of interest associated with the use of advanced technologies, including predictive data analytics and AI, by broker-dealers and investment advisors. The rule would require these entities to identify and neutralize or eliminate conflicts of interest related to their use of certain technologies, including AI, in investor interactions. This rule has garnered significant opposition, including criticism due to concerns about the breadth of technologies covered and the requirement to address conflicts of interest by neutralizing or eliminating them, rather than by disclosing them. Opponents such as Peirce and Uyeda also expressed the view that new rules are not needed because broker-dealers and investment advisers already are subject to rules governing conflicts of interest. The proposal’s supporters have cited the need for stronger investor protections against conflicts of interest in light of the lack of transparency about how new technologies may influence investor behavior, among other concerns.


Chapter 5


Enforcement remains a key priority for the SEC Commission and its staff.

In FY23, the Commission filed a total of 784 enforcement actions — a 3% increase over the prior year. In addition, nearly $5 billion in financial remedies was ordered by the SEC last year, including civil penalties and disgorgement — the second highest amount in SEC history, after the record-setting amount ordered in FY22. The SEC also obtained orders barring 133 individuals from serving as officers and directors of public companies, the highest number of officer and director bars obtained in a decade.

Five principles Gensler expects the SEC Division of Enforcement to consider

Restoration of public trust was a theme Gurbir Grewal, Director of the Division of Enforcement, continued to discuss in 2023 public remarks. In particular, Grewal has appealed to gatekeepers and compliance professionals to work together to create “a culture of proactive compliance,” which he has said involves education, engagement and execution.

As has been the case in recent years, the SEC continues to use its whistleblower program to further its enforcement agenda. FY23 was a record-breaking year for the SEC’s whistleblower program, including the highest amount of whistleblower awards in a single year — as well as a record-breaking number of whistleblower tips in 2023. Indicating the importance of the whistleblower program, the SEC also pursued enforcement actions against companies for seeking to limit employees’ ability to communicate concerns about potential securities law violations with the SEC.

The agency’s FY23 enforcement actions covered a range of topics and market participants. Some of the areas of particular focus were financial fraud and issuer disclosure, gatekeepers (such as auditors and lawyers), crypto assets, cybersecurity compliance, and environmental, social and governance (ESG) issues.

Expected activity in 2024


The SEC will continue to pursue an active agenda in 2024. In addition to the items mentioned above, significant SEC rulemaking includes new climate-related disclosure requirements for investment advisers and funds; new cybersecurity risk management requirements for broker-dealers, investment advisers and funds and other SEC-registered entities; and changes to various market structure rules. In addition to the SEC’s planned activities, litigation relating to SEC actions and authority as well as election-year politics will contribute to uncertainty around the capital market regulatory framework. Market participants should monitor developments closely and be prepared for change.

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