Securities and Exchange Commission — Capital Markets Regulation

The Securities and Exchange Commission is the primary regulator of the $100+ trillion U.S. capital markets — an independent agency whose mission of investor protection, fair markets, and capital formation touches every publicly traded company, investment fund, broker-dealer, and investment adviser in the country. Created by the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.) in the aftermath of the 1929 market crash, the SEC oversees the disclosure-based regulatory framework that makes U.S. capital markets the deepest and most liquid in the world: companies that want access to public capital must register their securities, disclose material information, and follow ongoing reporting requirements. The SEC's five commissioners serve staggered 5-year terms with for-cause removal protection, a structure whose constitutionality has faced mounting pressure since Seila Law (2020) — though the SEC's multi-member structure (unlike the single-director CFPB) remains on firmer Humphrey's Executor ground.

Legal Authority

• 15 U.S.C. § 78a et seq. (Securities Exchange Act of 1934) — Created the SEC; governs secondary market trading, broker-dealers, securities exchanges, clearing agencies, transfer agents, and public company disclosure (Exchange Act reporting)
• 15 U.S.C. § 77a et seq. (Securities Act of 1933) — Governs registration of securities offerings and initial public disclosures; imposes strict liability on issuers and underwriters for material misstatements in registration statements
• 15 U.S.C. § 80a-1 et seq. (Investment Company Act of 1940) — Regulates investment companies (mutual funds, ETFs, closed-end funds); requires registration, board independence, and portfolio restrictions
• 15 U.S.C. § 80b-1 et seq. (Investment Advisers Act of 1940) — Requires registration of investment advisers with AUM above thresholds; imposes fiduciary duty on registered advisers
• 15 U.S.C. § 7201 et seq. (Sarbanes-Oxley Act, 2002) — Enhanced corporate governance and auditing requirements; created the Public Company Accounting Oversight Board (PCAOB) under SEC oversight
• 15 U.S.C. § 77b (Dodd-Frank, 2010) — Expanded SEC authority over derivatives, hedge funds, credit rating agencies, and systemic risk; created whistleblower program

Key Mechanics

The SEC is an independent agency governed by five commissioners (no more than three from the same political party) serving staggered 5-year terms with for-cause removal protection, upheld under Humphrey's Executor v. United States (1935) for multi-member agencies. The SEC's regulatory framework is disclosure-based: companies accessing U.S. public capital markets must register securities, file periodic reports (10-K, 10-Q, 8-K), and make material information available to all investors — the SEC does not opine on whether a security is a good investment, only that disclosures are complete and accurate. Key regulatory functions: (1) corporate disclosure — public companies file with the SEC; EDGAR provides public access; the SEC's Division of Corporation Finance reviews filings; (2) broker-dealer regulation — broker-dealers must register, meet net capital requirements, and comply with FINRA rules (FINRA is an SRO under SEC oversight); (3) investment adviser oversight — advisers with AUM above $110M register with SEC; state regulators cover smaller advisers; (4) enforcement — the Division of Enforcement investigates securities fraud, insider trading, market manipulation, and unregistered offerings; the SEC may bring civil cases in federal court or administrative proceedings before in-house ALJs (see SEC v. Jarkesy for constitutional limits on administrative adjudication); (5) rulemaking — the SEC exercises broad authority to write rules under all major securities statutes, with notice-and-comment procedures under the APA. The SEC's five-commissioner multi-member structure is constitutionally more secure than the single-director CFPB structure challenged in Seila Law — but presidential authority over SEC commissioners remains contested.

Organization & Structure

The SEC is organized into five major operating divisions and multiple offices. The Division of Corporation Finance reviews public company disclosure filings (10-Ks, 10-Qs, proxy statements, registration statements); the Division of Enforcement investigates and prosecutes securities law violations (fraud, insider trading, market manipulation); the Division of Trading and Markets oversees broker-dealers, exchanges, and clearinghouses; the Division of Investment Management regulates mutual funds and investment advisers; and the Division of Examinations (formerly OCIE) conducts risk-based inspections of registrants. The SEC is funded by fees assessed on securities transactions and registrations — it does not rely on congressional appropriations, which gives it unusual budget stability but reduces congressional leverage.

Key Functions & Authorities

Securities registration and disclosure — companies seeking to raise capital from the public must register their securities with the SEC and provide a prospectus containing material information about the offering (Securities Act of 1933, 15 U.S.C. § 77a et seq.). Public companies must then file ongoing periodic reports (annual 10-K, quarterly 10-Q, current 8-K) under the Exchange Act. The SEC's disclosure-based framework does not prohibit risky investments — it requires issuers to disclose the risks so investors can decide. The materiality standard (information a reasonable investor would consider important) governs disclosure obligations and is the foundation of securities fraud litigation.

Enforcement — the SEC's Division of Enforcement brings civil cases against securities law violators: insider trading, accounting fraud, Ponzi schemes, market manipulation, and failure to disclose material information. The SEC can impose civil penalties, disgorgement of ill-gotten gains, injunctions, officer and director bars, and referrals to DOJ for criminal prosecution. The SEC and DOJ's Securities and Commodities Fraud section routinely coordinate on parallel civil/criminal cases. The SEC also has authority over gatekeepers — auditors, attorneys, and underwriters who failed to catch or report violations. Dodd-Frank (2010) created the SEC Whistleblower Program, which has paid over $2 billion in awards since inception and generated major enforcement cases.

Market structure and trading oversight — the Division of Trading and Markets oversees the National Market System (NMS) — the interconnected framework of exchanges, dark pools, and market makers through which U.S. equity trading occurs. The SEC's Regulation NMS (2005) standardized order execution and price improvement requirements. The SEC registers and oversees national securities exchanges (NYSE, Nasdaq), broker-dealers (~3,500 registered), clearing agencies (DTCC), and alternative trading systems. Market structure has been the subject of intense rulemaking under Chair Gensler (2021-2025), including controversial proposals on payment for order flow, odd-lot quoting, and equities market structure that generated significant industry opposition.

Investment management regulation — the Investment Company Act of 1940 (15 U.S.C. § 80a-1 et seq.) regulates mutual funds and closed-end funds; the Investment Advisers Act of 1940 (15 U.S.C. § 80b-1 et seq.) governs investment advisers. The SEC registers approximately 15,000 investment advisers managing ~$100 trillion in assets and 13,000 registered investment companies. The 2010 Dodd-Frank Act brought hedge funds and private equity advisers (above $150M in AUM) into SEC registration for the first time, significantly expanding the regulated population.

Crypto and digital assets — the SEC has asserted jurisdiction over most cryptocurrency tokens as securities under the Howey test (an investment of money in a common enterprise with expectation of profits from others' efforts). Major enforcement actions against Ripple, Coinbase, Kraken, and others defined the SEC's approach under Chair Gensler. The January 2024 approval of spot Bitcoin ETFs marked a significant policy shift; the Trump administration's 2025 SEC changed course on crypto enforcement, creating a dedicated crypto task force and withdrawing several pending enforcement actions.

Implementing Regulations

The SEC's administrative adjudication framework is codified at 17 CFR Part 201 — Rules of Practice (122 sections across 4 subparts, implementing the Securities Exchange Act, Securities Act, Investment Advisers Act, Investment Company Act, and other SEC-administered statutes). Part 201 governs all formal enforcement proceedings before the Commission and its hearing officers — the administrative law pathway the SEC uses to impose sanctions without filing in federal court:

• § 201.100 — Scope: the Rules of Practice apply to every proceeding before the Commission under any statute it administers; they do not apply to the SEC's internal rulemaking (governed by the APA's notice-and-comment provisions) or to routine examination functions
• § 201.102 — Appearance: respondents in SEC proceedings must appear through licensed attorneys or, for individuals, may appear pro se; non-attorney representatives are not permitted except by Commission order; the rule reflects the adversarial nature of enforcement proceedings where respondents face sanctions that can include civil penalties, disgorgement, officer bars, and revocation of registration
• § 201.110 — Presiding officer: proceedings are presided over by the Commission itself or by a hearing officer; when a hearing officer presides, the hearing officer issues an Initial Decision containing findings of fact, conclusions of law, and proposed sanctions; any party may petition the Commission to review the Initial Decision; the Commission reviews Initial Decisions de novo on legal questions and under substantial evidence on factual findings
• § 201.120 — Ex parte communications: the presiding officer may not receive ex parte communications about a pending proceeding from any party, and the Commission's investigative and prosecutorial staff who investigated the matter are separated from those deciding it (§ 201.121) — the same separation-of-functions principle required in all APA formal adjudications
• § 201.121 — Separation of functions: Commission staff who performed investigative or prosecutorial functions in a proceeding may not participate in the Commission's decisional process for that proceeding — a structural protection against the inherent tension in agencies that investigate and adjudicate the same conduct; the separation is internal and does not prevent the same agency from bringing and deciding cases (a constitutional question the Court addressed in Jarkesy)

Subpart B — Equal Access to Justice Act (§§ 201.200–201.214): when an eligible small entity or individual prevails in an SEC administrative proceeding and the SEC's position was not substantially justified, the prevailing party may recover attorney fees and expenses under the EAJA (5 U.S.C. § 504); fee applications must be filed within 30 days of a final decision; the SEC's Office of General Counsel adjudicates EAJA claims; fee awards in SEC proceedings are rare but are available when the agency pursued weak theories against smaller respondents.

Subpart F — Fair Fund and Disgorgement Plans (§§ 201.1100–201.1104): in any proceeding where the Commission or hearing officer orders disgorgement of ill-gotten gains, Sarbanes-Oxley § 308 (15 U.S.C. § 7246) authorizes combining the disgorgement with any civil penalties imposed in the same proceeding to create a Fair Fund — a pool of money distributed to the investors harmed by the violations. Fair Fund plans must be approved by the Commission; the plan identifies eligible harmed investors, specifies the distribution formula, appoints a fund administrator, and establishes a claims process. Fair Funds are the SEC's primary mechanism for compensating fraud victims: since 2002, the SEC has distributed over $20 billion to investors through Fair Fund distributions, including in major cases like Madoff ($4B+ over multiple rounds), Enron, WorldCom, and Theranos.

Subpart E — Civil Monetary Penalty Adjustments (§ 201.1001): the SEC must annually adjust its civil monetary penalty amounts under the Federal Civil Penalties Inflation Adjustment Act; the adjusted penalty schedule replaces the nominal statutory amounts and applies to all SEC administrative and civil proceedings; the maximum penalty per violation for most securities fraud ranges from roughly $100,000–$250,000 for individuals and $500,000–$1 million for entities depending on the tier, but many SEC enforcement orders impose penalties far exceeding these per-violation caps by citing hundreds of individual violations.

Post-Jarkesy context: SEC v. Jarkesy (144 S. Ct. 2117, 2024) held that the Seventh Amendment requires a jury trial when the SEC seeks civil penalties for conduct that resembles common-law fraud — specifically, the securities fraud claims at issue in that case. The decision constrains the SEC's historical practice of using Part 201 administrative proceedings (rather than federal court) to impose civil penalties for fraud-like conduct, because the Seventh Amendment jury trial right cannot be waived by an administrative forum designation. After Jarkesy, the SEC must pursue fraud-related civil penalty claims in federal court; Part 201 proceedings remain available for non-fraud violations (insider trading based on duty analysis, recordkeeping failures, registration violations) and for remedies other than civil penalties (disgorgement, bars, revocation). The full scope of Jarkesy's impact on the Part 201 framework is still being worked out in subsequent litigation.

How It Affects You

If you are a citizen or voter: The SEC's disclosure rules determine what public companies must tell you about their finances, risks, and executive compensation before you invest. SEC enforcement against fraud and insider trading protects market integrity that retirement accounts, pension funds, and 401(k)s depend on. SEC-registered investment advisers and broker-dealers have fiduciary and suitability obligations to retail investors.

If you are a business or regulated entity: Public companies bear significant ongoing SEC compliance obligations — quarterly and annual reporting, proxy statement preparation, insider trading policy maintenance, and Regulation FD (fair disclosure) compliance. If you raise capital through securities offerings (even private placements), exemptions from SEC registration (Regulation D, Regulation A+, Regulation CF) have specific conditions. Investment advisers and broker-dealers are subject to examination, registration, and net capital requirements. Crypto businesses face active jurisdictional uncertainty about which tokens are securities.

If you work at a federal agency: The SEC coordinates closely with CFTC (which regulates derivatives and commodity futures — SEC/CFTC jurisdictional lines are contested in crypto); with FINRA (a self-regulatory organization that the SEC oversees); with Treasury on systemic risk (FSOC membership); and with DOJ on criminal referrals. SEC staff no-action letters and interpretive guidance bind registrants and inform agency positions across financial regulation.

If you are a journalist, researcher, or policy analyst: The SEC's EDGAR database (sec.gov/cgi-bin/browse-edgar) provides free public access to all public company filings — 10-Ks, 10-Qs, 8-Ks, proxy statements, and registration statements. SEC enforcement actions are published on the SEC website with complaint filings. The SEC's DERA (Division of Economic and Risk Analysis) publishes working papers on market structure and economics. Litigation releases and administrative proceedings are searchable by company, individual, and date.

Recent Developments

• 2025 — The Trump SEC under Chair Paul Atkins reversed the Gensler-era enforcement posture on crypto, withdrawing actions against Ripple and others, establishing a crypto task force, and signaling a shift toward providing regulatory clarity rather than enforcement-led regulation; simultaneously, the SEC scaled back climate disclosure rules and ESG enforcement priorities.
• 2024 — The SEC approved spot Bitcoin ETFs in January 2024 after years of rejections, opening Bitcoin to mainstream retail investment through brokerage accounts; within months, Bitcoin ETFs accumulated over $50 billion in assets; Ethereum ETFs were approved in May 2024.
• 2023–2024 — SEC under Chair Gensler pursued an aggressive climate disclosure rulemaking (requiring public companies to disclose Scope 1, 2, and some Scope 3 GHG emissions), which was challenged in the Eighth Circuit; the final rule was stayed pending litigation and later withdrawn by the Trump administration.
• 2022 — SEC v. Ripple Labs — a federal district court ruled that XRP sales to institutional investors were unregistered securities transactions but retail exchange sales were not, creating a partial win for both the SEC and Ripple; the case shaped SEC crypto enforcement strategy through 2024.
• 2010 — Dodd-Frank Wall Street Reform Act vastly expanded the SEC's mandate: bringing derivatives trading to regulated exchanges (coordinated with CFTC); requiring registration of private fund advisers; creating the Whistleblower Program; establishing the Office of Credit Ratings; and adding proxy access and say-on-pay requirements for public companies.

In January 2026, the SEC's Office of the Advocate for Small Business Capital Formation published and delivered to Congress its 2025 staff report on capital-raising dynamics, described as a comprehensive, data-rich resource on how businesses access capital across public and private markets. The report represents the office's annual statutory reporting obligation to Congress on small business capital formation conditions. SEC Press Release, Jan. 8, 2026

In December 2025, the SEC filed charges against three purported crypto asset trading platforms—Morocoin Tech Corp., Berge Blockchain Technology Co. Ltd., and Cirkor Inc.—and four investment clubs including AI Wealth Inc. and Lane Wealth Inc. for a scheme targeting retail investors via social media. The action demonstrates that, despite the Trump-era SEC's broader retreat from crypto enforcement against established industry players, the agency continued to pursue fraud-based enforcement actions against alleged retail-investor scams in the crypto space. The case illustrates the post-Jarkesy enforcement landscape, where fraud-related civil penalty claims must be brought in federal court rather than through administrative proceedings. SEC Press Release, Dec. 22, 2025

In December 2025, the SEC charged Canadian citizen Nathan Gauvin and three entities he controls—Blackridge, LLC, Gray Digital Capital Management USA, LLC, and Gray Digital Technologies, LLC—with orchestrating two fraudulent securities schemes targeting retail investors recruited via the Discord platform. The action further illustrates that, notwithstanding the Trump-era SEC's broader retreat from crypto and industry enforcement, the agency continued to pursue fraud-based cases against alleged retail-investor scams. The case adds to a pattern of December 2025 enforcement actions demonstrating the post-Jarkesy landscape in which fraud-related civil penalty claims must be filed in federal court rather than through administrative proceedings. SEC Press Release, Dec. 10, 2025

In December 2025, the SEC announced the agenda and panelists for a December 16, 2025, roundtable on Rule 611 of Regulation NMS — the Order Protection Rule, which requires trading centers to establish policies preventing trade-throughs of protected quotations — and other associated rules and regulatory requirements. The roundtable was held at the University of Austin and signals active reconsideration of core Regulation NMS market structure rules first adopted in 2005. This development is consistent with the Trump-era SEC's broader review of equity market structure inherited from the Gensler administration. SEC Press Release, Dec. 10, 2025

In December 2025, the SEC's Crypto Task Force announced the agenda and panelists for a rescheduled roundtable on financial surveillance and privacy, held December 5, 2025. The roundtable signals the task force's interest in examining how new technologies affect the balance between regulatory oversight and investor privacy in digital asset markets. The event is consistent with the Trump-era SEC's broader posture of using roundtables and regulatory engagement — rather than enforcement actions — to develop crypto policy. SEC Press Release, Dec. 5, 2025

In November 2025, the SEC's Division of Examinations released its 2026 examination priorities, continuing the Division's practice of publishing annual priorities to provide transparency to registrants and investors about the topics it intends to focus on during risk-based inspections. The Division of Examinations (formerly OCIE) conducts inspections of registered investment advisers, broker-dealers, investment companies, and other registrants. The publication of examination priorities is a key compliance-planning tool for the approximately 15,000 registered investment advisers and 3,500 registered broker-dealers subject to SEC oversight. SEC Press Release, Nov. 17, 2025

In October 2025, the SEC issued a temporary exemptive order granting relief from certain compliance dates under Regulation NMS rules governing minimum pricing increments, access fees, and transparency of better-priced orders. The exemptive relief delays implementation of requirements adopted under those Regulation NMS amendments, providing registrants additional time to come into compliance. The action is consistent with the Trump-era SEC's broader reconsideration of equity market structure rules, including the December 2025 roundtable on Rule 611 of Regulation NMS. SEC Press Release, Oct. 31, 2025

In September 2025, the SEC announced enhanced efforts to assist broker-dealers and other market participants with implementation of mandatory central clearing requirements for U.S. Treasury securities, including launching a dedicated webpage consolidating status updates and staff guidance on the clearing rules. The Treasury clearing mandate, adopted under rules finalized in 2023, requires that an expanded set of Treasury market transactions be centrally cleared through a registered clearing agency. The initiative reflects ongoing coordination between the SEC and market participants as the compliance deadlines for the Treasury clearing rules approach. SEC Press Release, Sept. 30, 2025

In September 2025, the SEC issued an order granting conditional exemptive relief related to certain requirements of the National Market System Plan governing the Consolidated Audit Trail (CAT NMS Plan), Rule 613 of Regulation NMS, and associated rules, with the stated purpose of reducing the operating costs of the CAT system. The Consolidated Audit Trail is a comprehensive regulatory data system requiring broker-dealers and exchanges to report detailed information on orders and trades across U.S. equity and options markets. The exemptive order is consistent with the Trump-era SEC's broader reconsideration of market structure compliance burdens, including its October 2025 exemptive relief on Regulation NMS pricing increment rules and the December 2025 roundtable on Rule 611. SEC Press Release, Sept. 30, 2025

FINRA filed proposed rule change SR-FINRA-2026-001 with the SEC to adopt new FINRA Rule 3290 (Outside Activities Requirements), which would consolidate and replace existing FINRA Rules 3270 (Outside Business Activities of Registered Persons) and 3280 (Private Securities Transactions of an Associated Person). The proposal refocuses member-firm oversight obligations on outside activities that present heightened risks to members and the public, while aiming to reduce compliance burdens associated with lower-risk activities. As an SRO operating under SEC oversight, FINRA rule changes of this type are subject to SEC review and approval before taking effect. SR-FINRA-2026-001, FINRA Rule Filing

In January 2026, the SEC announced that Keith E. Cassidy was named Director of the Division of Examinations, the division responsible for risk-based inspections of registered investment advisers, broker-dealers, investment companies, and other registrants. Cassidy had served as Acting Director since May 2024 and previously held the role of Deputy Director of the division. SEC Press Release, Jan. 20, 2026

In January 2026, the SEC announced that Christina M. Thomas will rejoin the Division of Corporation Finance in February 2026 as Deputy Director and Chief Advisor on Disclosure, Policy, and Rulemaking. Thomas previously served at the Division and returns to a senior leadership role overseeing the division responsible for reviewing public company disclosure filings, including registration statements, periodic reports, and proxy statements. The appointment signals continued staffing of senior positions within the Division of Corporation Finance under the Trump-era SEC. SEC Press Release, Jan. 20, 2026

In January 2026, the SEC announced the senior advisory team within the Division of Corporation Finance responsible for advising Division Director James Moloney on rulemaking, disclosure review, and other matters before the Commission. The announcement reflects continued senior staffing of the Division of Corporation Finance under the Trump-era SEC, following the earlier January 2026 appointments of Deputy Director Christina M. Thomas and other leadership. The Division of Corporation Finance is responsible for reviewing public company disclosure filings, including registration statements, periodic reports, and proxy statements. SEC Press Release, Jan. 20, 2026

In January 2026, the SEC approved the 2026 budget for the Public Company Accounting Oversight Board (PCAOB) at $362.1 million, representing a 9.4% increase ($37.6 million) over the prior year, along with the related accounting support fee. The PCAOB is the auditor oversight body created by the Sarbanes-Oxley Act of 2002 and operates under SEC oversight. The SEC's annual approval of the PCAOB budget and accounting support fee is a statutory requirement under Sarbanes-Oxley. SEC Press Release, Jan. 22, 2026

In January 2026, the SEC's Small Business Capital Formation Advisory Committee announced a public meeting scheduled for February 24, 2026, at SEC Headquarters in Washington, D.C. The meeting agenda includes continued discussion of the regulatory framework for finders — intermediaries who connect issuers with investors outside the registered broker-dealer framework — and an initial exploration of the private secondary market. Both topics are of direct relevance to small business capital formation policy and have been subjects of ongoing regulatory debate at the SEC. SEC Press Release, Jan. 22, 2026

FINRA filed proposed rule change SR-FINRA-2026-002 with the SEC to amend FINRA Rules 5110 (Corporate Financing Rule—Underwriting Terms and Arrangements) and 5123 (Private Placements of Securities). The proposed amendments to Rule 5110 would improve and clarify the valuation method for securities considered underwriting compensation and add new exclusions from underwriting compensation that codify existing staff exemptions. The proposed amendments to Rule 5123 would expand available exemptions to cover offerings sold to investors qualifying as accredited investors under certain family office and large-AUM-entity categories, consistent with the SEC's own treatment of those categories. As an SRO operating under SEC oversight, FINRA rule changes of this type are subject to SEC review and approval before taking effect. SR-FINRA-2026-002, FINRA Rule Filing

FINRA filed proposed rule change SR-FINRA-2026-003 with the SEC to adopt new FINRA Rule 7660B (FINRA/NYSE Trade Reporting Facility Fees for Non-Participants), which would establish a fee applicable to FINRA members that do not use the FINRA/NYSE Trade Reporting Facility for trade reporting but elect to purchase specified services from it. The proposal addresses the fee structure for non-participant access to TRF services, a distinct matter from trade reporting obligations themselves. As an SRO operating under SEC oversight, FINRA rule changes of this type are subject to SEC review and approval before taking effect. SR-FINRA-2026-003, FINRA Rule Filing

In January 2026, the SEC appointed Demetrios (Jim) Logothetis as Chairman of the Public Company Accounting Oversight Board (PCAOB), along with Mark Calabria, Kyle Hauptman, and Steven Laughton as Board members. The PCAOB is the auditor oversight body created by the Sarbanes-Oxley Act of 2002 and operates under SEC oversight, with its leadership appointed by the SEC. The appointments represent a significant leadership change at the PCAOB under the Trump-era SEC, following the Commission's January 2026 approval of the PCAOB's $362.1 million budget. SEC Press Release, Jan. 30, 2026

In February 2026, FINRA's Board approved updates to allow broker-dealers to make electronic delivery (e-delivery) the default method for delivering investor notices, disclosures, and other communications required under FINRA rules, while preserving customers' ability to opt for paper delivery. The change, part of FINRA's Forward rule modernization initiative, would require firms to provide appropriate notice and an opportunity to choose paper delivery, and to remediate e-delivery failures. FINRA plans to file proposed rule changes with the SEC, publish related guidance in a Regulatory Notice, and monitor implementation — meaning the new framework will be subject to SEC review and approval before taking effect. The development follows December 2025 passage of bipartisan House legislation that would direct the SEC and SROs to promulgate rules establishing e-delivery as the default. FINRA Blog, Robert Cook, Feb. 3, 2026

In February 2026, the SEC's Division of Economic and Risk Analysis (DERA) published two new reports on exchange traded funds and fund mergers, along with updated statistics and data visualizations on municipal advisors, transfer agents, and security-based swap dealers. The publications represent DERA's ongoing role in producing market data and economic analysis across the SEC's regulated populations, including the approximately 13,000 registered investment companies and other registrants subject to SEC oversight. SEC Press Release, Feb. 5, 2026

FINRA filed proposed rule change SR-FINRA-2026-004 with the SEC to amend FINRA Rule 2210 (Communications with the Public), and SR-FINRA-2026-005 to amend FINRA Rules 6380A and 6380B (Transaction Reporting) to provide a limited, temporary exception from reporting specified overnight transactions prior to 8:00 a.m. Eastern Time. Both proposals are subject to SEC review and approval before taking effect, as FINRA operates as a self-regulatory organization under SEC oversight. Additionally, SR-FINRA-2025-017 proposes to amend FINRA Rule 4210 (Margin Requirements) to replace existing day trading margin provisions with intraday margin standards, representing a substantive change to broker-dealer margin obligations. FINRA Rule Filings, SR-FINRA-2026-004, SR-FINRA-2026-005, SR-FINRA-2025-017

In January 2026, FINRA issued a Trade Reporting Notice reminding member firms of upcoming enhancements to FINRA equity trade reporting facilities to support reporting of fractional share quantities, with an effective date of February 23, 2026, for NMS stock transactions. Under the updated guidance, members engaged in fractional share trading will be required to report fractional share quantities up to six decimal places using a new "Fractional Share Quantity" field in addition to the existing whole-number "Quantity" field; firms that do not engage in fractional trading will not need to make reporting changes. FINRA also provided additional guidance for edge cases where fractional amounts are smaller than six decimal places, including where truncation would result in a quantity of zero. The implementation for OTC Equity Securities will be addressed in a future notice. FINRA Trade Reporting Notice, Jan. 14, 2026

In February 2026, the SEC's Division of Enforcement announced significant updates to its Enforcement Manual, describing the changes as reflecting the Commission's commitment to fairness, transparency, and efficiency in its investigations. The Enforcement Manual governs the Division's internal procedures for conducting investigations and bringing enforcement actions, and updates to it can signal shifts in enforcement priorities, investigative standards, or procedural expectations for respondents and their counsel. The announcement is consistent with the Trump-era SEC's broader reconsideration of enforcement posture across securities, crypto, and related areas. SEC Press Release, Feb. 24, 2026

In February 2026, the SEC announced a roundtable on private market valuations and responsible retailization, scheduled for March 4, 2026, and hosted by the Division of Investment Management. The roundtable reflects growing regulatory attention to the expansion of retail investor access to private markets and the valuation challenges that accompany that access. The development is consistent with the Trump-era SEC's broader interest in capital formation and small business capital formation policy, including the Small Business Capital Formation Advisory Committee's February 2026 agenda items on finders and the private secondary market. SEC Press Release, Feb. 26, 2026

In February 2026, the SEC adopted final rule and form amendments to implement the Holding Foreign Insiders Accountable Act (HFIA), which increases transparency into the holdings and transactions of foreign insiders in U.S. public companies. The rulemaking reflects a statutory mandate rather than discretionary SEC action, as the HFIA was recently enacted by Congress and required corresponding amendments to SEC rules and forms. The final rules represent a substantive addition to the SEC's disclosure framework governing insider reporting obligations for foreign nationals with positions in U.S.-listed companies. SEC Press Release, Feb. 27, 2026

In February 2026, the SEC approved FINRA rule amendments raising the gift limit applicable to member firms from $100 to $300 per person per year and codifying existing guidance and interpretations, effective February 12, 2026. The SEC also approved, on February 10, 2026, rule amendments expanding the permitted activities of Capital Acquisition Brokers (CABs) to allow them to represent buyers as well as sellers in specified private placement and M&A transactions, a change intended to encourage more unregistered firms to register as CABs. Separately, FINRA issued new guidance on February 6, 2026, permitting member firms to use negative consent letters for bulk transfers or assignments of customer accounts in exigent circumstances without first obtaining staff no-objection, and consolidating prior guidance on negative consent practices. FINRA Blog, Robert Colby, Mar. 2, 2026

In March 2026, FINRA's Enforcement division announced a series of procedural enhancements to its enforcement program under the FINRA Forward initiative, aimed at improving transparency, efficiency, and fairness for member firm respondents. Key changes include offering introductory meetings to potential respondents at the outset of enforcement matters, mandatory 90-day status updates throughout investigations, and an additional pre-resolution meeting to share investigative findings before formal charges are proposed. FINRA also launched a pilot program allowing firms that self-report rule violations under Rule 4530(b) to conduct internal reviews without a concurrent FINRA investigation in appropriate circumstances, and extended the standard Wells response period to 30 calendar days. The division indicated it plans to publish an enforcement manual and release an external assessment of the enforcement function by former SEC Commissioner Troy Paredes and Professor Paul Eckert in Q2 2026. FINRA Blog, Bill St. Louis, Mar. 2, 2026

In March 2026, the SEC announced it will host a roundtable on April 16, 2026, to discuss listed options market structure, including facilitating competition in a quote-driven market, evaluating the customer experience, and related topics. The roundtable follows the December 2025 roundtable on Rule 611 of Regulation NMS and the October 2025 exemptive relief on Regulation NMS pricing increment rules, reflecting the Trump-era SEC's broader reconsideration of equity and options market structure inherited from the Gensler administration. The options market structure roundtable represents a distinct regulatory focus area from the equity market structure reviews already underway, as listed options markets operate under separate exchange and quoting frameworks. SEC Press Release, Mar. 5, 2026

In March 2026, the House Financial Services Committee scheduled two hearings directly relevant to SEC-regulated markets: a Capital Markets Subcommittee hearing on March 5, 2026, entitled "The Role of Self-Regulatory Organizations in U.S. Markets: Examining FINRA and the MSRB," and a Full Committee hearing on March 25, 2026, entitled "Tokenization and the Future of Securities: Modernizing Our Capital Markets." The SRO oversight hearing reflects congressional attention to FINRA and MSRB governance at a time when FINRA is pursuing significant rule modernization initiatives under its FINRA Forward initiative. The tokenization hearing signals growing legislative interest in how existing securities law frameworks apply to blockchain-based representations of securities, a question with direct implications for SEC jurisdiction and rulemaking authority. House Financial Services Committee, Feb. 19, 2026

In March 2026, the SEC and CFTC announced a Memorandum of Understanding (MOU) to guide coordination and collaboration between the two agencies, with stated goals of supporting lawful innovation, upholding market integrity, and ensuring investor and customer protection. The MOU is described as historic by both agencies and reflects ongoing efforts to address the contested jurisdictional boundary between the SEC and CFTC, particularly in areas such as crypto and digital assets where both agencies have asserted regulatory interests. The development is directly relevant to the SEC's coordination role with the CFTC noted in the article, including contested SEC/CFTC jurisdictional lines in crypto markets. SEC Press Release, Mar. 11, 2026

In March 2026, FINRA's Board of Governors approved five rule proposals at its March 4–5 meeting under the FINRA Forward rule modernization initiative: shortened waiting periods to retake FINRA qualification exams; electronic delivery of regulatory requests to member firms through FINRA Gateway; elimination of the principal-approval requirement for late allocations of bulk investment adviser orders; adjusted reconciliation requirements for certain alternative investments to conform with recent SEC no-action relief; and amendments to FINRA's Codes of Arbitration Procedure to give parties greater input into replacing arbitrators and to codify compensation for replacement arbitrators. The Board also received an update on enhancements to FINRA's enforcement program and approved the allocation of 2025 fine monies, with details to be released in a forthcoming Report on the Use of 2025 Fine Monies. All five rule proposals are subject to SEC review and approval before taking effect, as FINRA operates as a self-regulatory organization under SEC oversight. FINRA Board of Governors Meeting Report, Mar. 12, 2026

In March 2026, Judge Margaret A. Ryan resigned as Director of the SEC's Division of Enforcement, the division responsible for investigating and prosecuting securities law violations including fraud, insider trading, and market manipulation. Principal Deputy Director Sam Waldon was named Acting Director of the Division, effective March 2026. The departure represents a significant leadership change within one of the SEC's most consequential operating divisions under the Trump-era SEC. SEC Press Release, Mar. 16, 2026

In March 2026, the SEC issued an interpretation clarifying how federal securities laws apply to certain crypto assets and transactions involving crypto assets. The action represents a significant step in the Commission's efforts to provide regulatory clarity in the digital asset space, consistent with the Trump-era SEC's broader shift away from enforcement-led crypto regulation toward affirmative guidance. The interpretation is directly relevant to the ongoing jurisdictional uncertainty facing crypto businesses described in the article. SEC Press Release, Mar. 17, 2026

Pending Legislation

FINRA filed proposed rule change SR-FINRA-2026-004 with the SEC to amend FINRA Rule 2210 (Communications with the Public) to allow member firms to project the performance or provide a targeted return with respect to a security, securities portfolio, or asset allocation or other investment strategy in their communications with the public, subject to specified conditions designed to ensure such projections are derived from a sound basis. The proposal represents a substantive change to longstanding FINRA restrictions on performance projections in member communications. As an SRO operating under SEC oversight, the rule change is subject to SEC review and approval before taking effect. SR-FINRA-2026-004, FINRA Rule Filing

FINRA's February 2026 Quarterly Regulatory Policy Agenda identifies several significant rulemaking initiatives not yet filed with the SEC, including proposals to further protect senior investors and vulnerable adults from fraud and financial exploitation (estimated Q3 2026 filing), to extend trade reporting facility operating hours to 23 hours each business day to align with upcoming SIP expanded hours (Rule 6380A/6380B, Q3 2026), to exempt collective trust funds from IPO allocation prohibitions under Rules 5130 and 5131 (Q2 2026), and to modernize supervision rules including with respect to branch offices (Q4 2026 and following). The agenda also reflects that SR-FINRA-2024-021, which amends the Codes of Arbitration Procedure to accelerate processing of arbitration proceedings for parties qualifying based on age or health condition, was approved by the SEC in August 2025 with an implementation date of March 30, 2026, and SR-FINRA-2025-002, adopting new Rule 6152 requiring disclosure of order execution information for NMS stocks, was approved by the SEC in June 2025. All Current Priorities items remain subject to FINRA Board approval and subsequent SEC review before taking effect. FINRA Quarterly Regulatory Policy Agenda, Feb. 25, 2026

In March 2026, the SEC proposed amendments to Exchange Act Rule 15c2-11, which governs information-gathering and review requirements for broker-dealers that publish quotations for, or maintain a continuous quoted market in, securities. The proposal represents a substantive rulemaking action affecting broker-dealer obligations in the OTC and quotation markets, which fall under the Division of Trading and Markets. The proposed amendments are subject to notice-and-comment rulemaking under the APA before taking effect. SEC Press Release, Mar. 16, 2026