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The complexity of our markets makes it hard to know what’s happening with our money and transactions – and the best solution is more transparency and clear disclosures. Unfortunately, existing disclosures are (at best) outdated or (at worst) intentionally opaque or misleading. Simplifying markets will help to address this, but disclosure requirements must be modernized and then continually updated. Point-in-time disclosure standards are inadequate, and must be continuously updated over time using the SEC’s authority of retrospective review.

There are holes in our regulatory disclosure framework that must be addressed, including Single Dealer Platforms (SDPs) that transact significant market share, securities lending, 13Fs, and the ability for brokers to expunge their records.

The opacity and complexity of markets has further removed individual investors from their investments, and from directly interacting with issuers. We aim to reconnect investors and companies, and modernize our framework for purchasing and holding securities.

key issues

  • Modernize Rules 605 and 606: SEC rules disclosing execution quality across markets and information about routing of customer orders should be updated to reflect the best prices available in the market, including summary information that make them understandable by retail investors. Institutional 606 reports should be made public again.
  • Continual Improvement of Disclosures: It is too easy for disclosures to become outdated, and regulators move too slowly to update them. Rule 605 hasn’t been materially updated in over 20 years. The SEC must fulfill its duty of retrospective review or delegate it to a group that will.
  • Lending Disclosures: Investors have the right to know whether their securities have been lent out, and how much revenue the broker has received.
  • 13F Disclosures: 13F disclosures must be updated to include short positions, and any synthetic or derivative positions that would give an investor long or short exposure to an underlying security.

opportunities for advocacy