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Lawmakers Challenge Piwowar Actions; SEC Adopts T+2, Announces Compliance Outreach Program

As SEC chair nominee Jay Clayton awaits the final vote of the U.S. senate, the acting chairman’s actions are under scrutiny. Four Democratic Senators in a letter to the SEC inspector general requested an investigation of Acting Chairman Michael Piwowar’s recent initiatives. The Senators took aim at Piwowar’s staff directive to undertake a review of the conflict minerals rule; his soliciting of public comments on the pay ratio rule and call for reconsideration of the rule’s implementation; and media reports of “curbs on the agency’s enforcement staff.”  The Senators expressed concern that: “Commissioner Piwowar’s actions may lack adequate justification, undermine the SEC’s mission, exceed his authority as Acting Chairman, violate other procedural requirements, and could potentially prove to be a waste of the SEC staff’s precious time and resources.”

Meanwhile, the SEC adopted an amendment to an Exchange Act rule to shorten by one business day the standard settlement cycle for most broker-dealer securities transactions.  Currently, the standard settlement cycle for these transactions is three business days, known as T+3.  The amended rule shortens the settlement cycle to two business days, or T+2. Broker-dealers will be required to comply with the amended rule beginning on September 5, 2017. The SEC also announced that it will be conducting compliance outreach program seminars for investment companies and investment advisers in four cities. The seminars are intended to help chief compliance officers and other senior fund personnel enhance compliance programs and will include an overview of OCIE’s 2017 priorities, among other topics.