As part of the SEC’s ongoing efforts to help address investor confusion about the nature of their relationships with investment advisers and broker-dealers, the SEC’s Office of the Investor Advocate released a report on investor testing to the public on November 7th. This report was conducted by the RAND Corporation and was based on investor testing feedback on a sample Relationship Summary issued in April 2018 as part of a package of proposed rulemakings and interpretations that were designed to enhance the quality and transparency of investors’ relationships with investment industry entities.

The SEC’s Enforcement Division issued its annual report of its ongoing efforts to protect investors and market integrity on November 2nd, 2018. The report highlights several significant actions and initiatives that took place in FY 2018.

On October 31, the SEC issued a statement setting forth its position for a limited time period concerning specific provisions of its Business Conduct Standards for Security-Based Swap (SBS) Dealers and Major Security-Based Swap Participants (Entities). Certain actions with regard to these provisions will not provide a basis for a Commission enforcement action. In addition, the SEC’s position on the ability of parties to security-based swaps to rely on written representations is also addressed by the statement. This statement is intended to minimize potential market disruptions to existing counterparty relationships resulting solely from documentation implementation issues that may arise when security-based swap dealers and major security-based swap participants are required to register with the SEC. Once they are registered with the SEC, entities that are also registered with the Commodity Futures Trading Commission (CFTC) will be required to comply with both the SEC’s Business Conduct Standards as well as analogous rules adopted by the CFTC in 2012 applicable to SBS Entities.

The SEC has updated the Public Alert: Unregistered Soliciting Entities (PAUSE) list. This list, maintained by the Commission, contains unregistered entities and firms that use misleading information to solicit investors. Sixteen soliciting entities, four impersonators of genuine firms, and eight bogus regulators have been added to the list. Many of the targets of these firms are non-US investors, and all investors should be cautious in dealing with such entities. In addition, the SEC made technical updates to its database to improve the ability of retail investors to search for and obtain information about unregistered entities. This update consolidates active and archived lists.

On October 31st, the SEC voted to adopt amendments to modernize the property disclosure requirements and related guidance for mining registrants under the Securities Act of 1933 and the Securities Exchange Act of 1934. Under these final rules, a registrant with material mining operations must disclose specified information regarding its mineral resources and reserves in its SEC filings. These amendments will provide investors with a more comprehensive understanding of a registrant’s mining properties, as well as more closely align the SEC’s disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards as embodied by the Committee for Reserves International Reporting Standards (CRIRSCO). The amendments also rescind Industry Guide 7 and consolidate the disclosure requirements for registrants with material mining operations in a new subpart of Regulation S-K.

On October 30th, the SEC proposed rule changes concerning variable annuities and variable life insurance contracts that would improve disclosure for investors. The amendments are aimed at helping investors better understand these contracts’ features, fees, and risks. They are also designed to aid investors in finding the information needed to make informed investment decisions more easily. The Commission is seeking public comment on their proposed modifications.

On October 18th, the SEC announced the launch of the Strategic Hub for Innovation and Financial Technology (FinHub). The FinHub will be a resource for public engagement on the SEC’s finanical technology (FinTech) related issues and initiatives. These issues include distributed ledger technology (including digital assets), automated investment advice, digital marketplace financing, and artificial intelligence/machine learning, among other points of interest. FinHub will replace, consolidate, and build on the work of several internal working groups at the SEC that focus on similar issues.

On October 18th, the SEC announced it is partnering with the National Center for Middle Market at The Ohio State University Max M. Fisher College of Business to host the SEC’s annual Government-Business Forum on Small Business Capital Formation. The Government-Business Forum, which is an annual forum providing a platform to highlight additional measures to improve small business capital formation, will be held on December 12th.

The IFRS Foundation has published a proposed update to the IFRS Taxonomy 2018, Common Practice (IFRS 13 Fair Value Measurement). This Proposed Update is one of multiple updates released throughout the year to reflect amendments to International Financial Reporting Standards. The updates can represent changes to common practice elements, taxonomy architecture, or annual improvements that may include refinements to taxonomy data models in order to support consistent tagging or improvements that better reflect presentation and disclosure requirements.

The SEC released an investigative report on October 16th, 2018, that focused on cyber threats and their relationship to internal accounting controls. The report cautions that public companies should consider cyber threats, including cyber fraud, when implementing internal accounting controls.

The third pilot phase for N-PORT filers began on October 1, 2018. From October 1 through March 31, 2019, filers will be able to submit test filings of the N-PORT forms to EDGAR. Live filings will not be permitted and will be rejected until April 1, 2019.

On September 26th, SEC voted to propose new rule amendments to codify existing exemptions for credit rating agencies registered with the SEC as nationally recognized statistical rating organizations (NRSROs).

On October 1, 2018, EDGAR Release 18.3 was released by the Securities and Exchange Commission. This release contains changes to the N-CEN and N-PORT EDGAR forms as well as improvements to EDGAR XBRL validation in addition to other changes.

Members of the SEC’s staff will host a two-day roundtable on October 25 and October 26 on market data and market access. This roundtable is hosted by the SEC’s Division of Trading and Markets.

Members of the SEC’s staff will host a roundtable on November 15 to hear investor, issuer, and other market participant views about the proxy process and rules. This roundtable will focus on key aspects of the proxy system in the US, including proxy voting mechanics and technology, the shareholder proposal process, and the role and regulation of proxy advisory firms.