SEC Speech "Improving Investor Engagement"

Ties de Kok
Mar 18, 2017

Dear fellow researchers,

An interesting speech by Rick Fleming, SEC Investor Advocate, peaked my interest:

Especially the part about the importance of scientific research which begins roughly hallway with this sentence:
"My second suggestion is that the Commission should commit itself to more scientific research regarding investors."

What do you all think about his statements?

Thorsten Sellhorn
May 06, 2017

Thanks for posting this. I believe it is about time that the SEC move in this direction. However, I fear this view is still not nearly mainstream, not even within the SEC. One question is whether rule-makers have the incentive to have their rule-making be evidence-based, and whether they want it to be amenable to ex-post effectiveness evaluation. Another issue is whether the SEC has clear ideas on what constitutes high-quality evidence.

Ties de Kok
May 06, 2017

Interesting find!    

I think this part on the "Evidence Summits" is particularly interesting:    "In fact, we are beginning to study this very issue, and I am happy to invite you all to an event that we will be holding at the Commission two weeks from today. As we begin to design research projects like this, we first want to review the existing data and engage with leading researchers in order to leverage the existing knowledge base to the fullest and optimize the use of our limited resources. We expect that in-person research reviews—what we will call “Evidence Summits”—will become routine, but our kick-off Evidence Summit on March 10 will be a public event and will include broader topics than usual. In particular, at this event we will discuss how disclosure impacts decision-making and how to make disclosure effective for a wide variety of users, before turning to the more specific question of how to improve mutual fund disclosures."