SEC Expected to Take Tighter Regulatory Approach Under New Leadership

Karen Garnett, partner at Proskauer, participated in a video interview in conjunction with REITwise 2021: Nareit’s Law, Accounting & Finance Conference.

Garnett discussed some of the possible changes likely to occur at the Securities and Exchange Commission (SEC) under the new leadership of Gary Gensler. She said a more regulatory approach is to be expected, with an uptick in enforcement activity, while rulemaking priorities are expected to result in greater disclosure by public companies.

The SEC is also likely to take a more active role on climate change disclosures and diversity, equity, and inclusion (DEI) matters.

“That is absolutely something that everyone is expecting and really it’s already happening at the SEC,” Garnett said, adding that the SEC has recently created a new position—senior policy advisor for climate and ESG.

“Climate will be front and center; DEI will be close behind that,” Garnett said. Some areas where the SEC might focus on include more prescriptive disclosure requirements related to board and workforce diversity, she noted.

Garnett also discussed the high level of activity involving special purpose acquisition companies (SPACs), noting that the amount of capital raised since the start of 2021 is already approaching what was raised in 2020.