SEC's Gensler Signals Likely OK to Extend FINRA Remote Inspections

Cybersecurity, Private Fund Plans

Gensler also told members of the Senate Banking Committee that SEC staff is developing a proposal “on cybersecurity risk governance, which could address issues such as cyber hygiene and incident reporting.”

Also on the SEC’s plate: private funds, “in particular the conflicts of interest their managers may have and the information they are providing investors about the fees they charge,” Gensler relayed. “I believe we can enhance disclosures in this area, better enabling pensions and others investing in these private funds to get the information they need to make investment decisions. Ultimately, every pension fund investing in these private funds would benefit if there were greater transparency and competition in this space.”

Gensler added that “following the challenges of the spring of 2020, I believe we can build greater resiliency in both money market funds and open-end bond funds,” noting that he’s asked SEC staff for recommendations to address those issues.

“Given the disruptions in the nearly $5 trillion money market fund sector in spring 2020, particularly amongst prime money market funds, I believe it is time to reflect upon the reforms of 2014 and 2010 to see if we can further improve resiliency, particularly in times of stress,” Gensler said.

He noted that he anticipates a commission recommendation by “Q1 on money markets and gates.”

Gensler added: “Given significant growth in open-end funds and some lessons learned last spring, I believe it also is appropriate to take a close look at this $5-plus trillion sector, to enhance resiliency during periods of stress.”