ASA Sends Letter to SEC’s Investor Advisory Committee on Disclosure Reform and Regulation NMS

WASHINGTON – The American Securities Association (ASA) sent a letter to the Securities and Exchange Commission (SEC) ahead of its meeting of the Investor Advisory Committee (IAC) calling for for Reg S-K modernization anchored in materiality, and conditional support for rescinding Rule 611 paired with market safeguards.

"Public company disclosure and the future of Regulation NMS go to the heart of how investors access accurate information and receive fair, cost effective, and efficient execution of their trades," said ASA President & CEO Chris Iacovella. “The IAC should fully understand how the pros and cons of AI will impact investors, the markets, and regulated entities before making any recommendations to the Commission regarding AI-related rule changes.”

On Regulation S-K, ASA renewed its recommendations that the Commission:

• Ground reforms in the longstanding materiality standard

• Consolidate overlapping cybersecurity disclosure obligations

• Adopt page limits for compensation discussion and analysis

• Extend a safe harbor for forward-looking risk factor disclosures

• Permit companies to incorporate Form 8-K disclosures by reference in periodic reports
  

On Regulation NMS, ASA offered conditional support for rescinding Rule 611 and Rule 610(e), arguing genuine venue competition, not a mandatory trade-through rule, is the better path to reducing fragmentation. ASA urged the Commission to:

• Confirm the consolidated NBBO will remain an objective benchmark, paired with a rebuttable best-execution safe harbor in SEC rule text and FINRA Rule 5310

• Address market-data/connectivity mandates and SIP revenue-allocation incentives that could worsen venue proliferation

• Pair rescission with reduced access fees and tick sizes, a minimum six-month transition period, and coordinated SEC/FINRA implementation guidance to protect lit markets from off-exchange migration
  

To read ASA’s full letter to the SEC, click here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.