The financial markets are changing quickly, particularly with respect to industrial applications and cryptocurrency. For a long time, the SEC has been receiving pressure to regulate and support these industries, and now, it is adding an Office of Crypto Assets and another office focused on Industrial Applications and Services. These offices will be added to the Division of Corporation Finance’s Disclosure Review Program (DRP). This division is responsible for reviewing company filings. Both of these offices will join seven other existing offices that protect investors and promote the formation of new capital. Both of these offices are expected to be opened later this fall.
The SEC Believes More Growth Requires More Support
According to the SEC, both of these sectors have seen a tremendous amount of growth during the past few years, and the SEC believes that the scepters require a bit more support. According to Renee Jones, the Director of the Division of Corporate Finance, “The creation of these new offices will enable the DRP to enhance its focus in the areas of crypto assets, financial institutions, life sciences, and industrial applications and services.”
The belief is that new companies opening in these sectors require more support from the DRP, and by opening new offices that are dedicated specifically to these sectors, the SEC will be in a position to provide the necessary support.
What Is the Office of Crypto Assets?
The Office of Crypto Assets is a division that will review filings related to crypto assets. There is some concern that there is not enough regulation in this industry right now, and many investors are worried that they do not have enough protection, particularly given the volatility of this market. When companies file documents with the DRP, this office will be responsible for reviewing them. There are a handful of unique filing issues that are developing in this industry, and the Office of Crypto Assets will seek to address them appropriately. Companies require regulatory guidance, and investors expect a greater degree of transparency from these companies and the SEC.
What Is the Office of Industrial Applications and Services?
The Office of Industrial Applications and Services will be responsible for segmenting duties between its team and the Office of Life Sciences. Specifically, the Office of Industrial Applications and Services will be taking over filing reviews for companies that are not related to pharmaceuticals, medicine, or biotechnology. During the past few years, the SEC believes that the life sciences industry has grown and evolved significantly. Now, there are too many companies and filings that are assigned to the Office of Life Sciences, which is why a transition is necessary. Now, there is a separate group, the Office of Industrial Applications and Services, that will take some of the work away from the Office of Life Sciences. This will allow both of these departments to spend the requisite amount of time on their respective documents, providing answers to investors and companies who have questions about regulatory issues.
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Right now, it remains to be seen how the addition of two new offices will change regulatory requirements. These offices will start reviewing documents, identifying trends, and making regulatory proposals to the rest of the SEC. That is why companies in these sectors need to keep a close eye on how reporting requirements might change in the future.
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