Sen. Elizabeth Warren, D-Mass., blasted the Securities and Exchange Commission's disclosure effectiveness initiative, saying it was "ill-conceived" and could limit public companies' disclosure requirements "in ways that would harm investors."
Warren, D-Mass., accused White on Thursday in a letter of taking a "narrow" congressional mandate under the Jumpstart Our Business Startups Act and transforming it into a "comprehensive review of disclosure requirements" that "permit publicly traded corporations to disclose less information to their investors and the public."
Warren's letter was in response to comments White made at a June 14 Senate Banking Committee hearing that the SEC review "is meant to make disclosure more meaningful to investors" and reduce information that can be "repetitive."
But Warren countered that instead of moving forward on issues intended to help investors, the SEC has "actually headed in the opposite direction" with its disclosure effectiveness initiative that she said White has "dedicated significant time and resources" to.
Warren told White to tell her by Aug. 1 how the agency will protect investors by implementing the disclosure initiative as well as "the narrower disclosure review" mandated in the Fixing America's Surface Transportation (FAST) Act that Congress passed in December.
The FAST Act called on the SEC to "eliminate provisions of Regulation S-K," the rule that lays out reporting requirements for various SEC filings used by public companies, "… for all issuers that are duplicative, overlapping, outdated or unnecessary," while still "providing all material information to investors."
White was told to tell Warren by Aug. 1 how the agency will determine what is "material" or "unnecessary" to investors under the initiative as well as how much time and money the agency spent on the disclosure effective initiative between April 2013 and the passage of the FAST Act in December 2015. Warren also asked White to provide evidence of "investor overload."
