In remarks to the SEC Investor Advisory Committee, Commissioner Hester M. Peirce urged a renewed focus on simplifying public company disclosure requirements and addressing operational frictions in fund proxy voting, while encouraging continued committee work on securities tokenization. She also noted that Commission staff is working on an innovation exemption to facilitate limited trading of certain tokenized securities, describing it as narrower than a “blanket” exemption discussed in the committee’s draft recommendation. On disclosure reform, Peirce argued that mandated disclosures can consume significant time and attention while obscuring, rather than enhancing, investor-relevant information, citing some executive compensation tables as an example. On fund proxy voting, she highlighted the Investment Company Act of 1940 quorum standard of more than 50% of a fund’s outstanding voting securities for many approvals, which she described as difficult and costly given low retail voting participation. She also emphasized that proxy voting authority belongs to the fund, and that if delegated to an adviser it must be exercised in the interests of the fund. On tokenization, Peirce invited the committee to test its draft recommendations against practical and legal questions, including whether existing issuer disclosure is insufficient to explain ownership rights in tokenized securities, whether tokenized security entitlements warrant new disclosures, how “atomic settlement” would interact with the SEC’s T+1 settlement rules and other requirements, how to apply investor protection standards where intermediaries are absent or do not fit Exchange Act definitions, whether an exemption should allow multiple tokenization models and require issuer consent, and what conditions could preserve core protections and limit regulatory arbitrage.
U.S. Securities & Exchange Commission 2026-03-12
U.S. Securities and Exchange Commission Commissioner Peirce flags staff work on a narrow innovation exemption for tokenized securities and presses for disclosure and fund proxy voting reforms
SEC Commissioner Hester M. Peirce, addressing the Investor Advisory Committee, advocated for simplifying public company disclosures and addressing fund proxy voting frictions, while supporting securities tokenization. She highlighted the need for an innovation exemption for limited trading of tokenized securities and questioned existing issuer disclosures' adequacy. Peirce also discussed challenges with the Investment Company Act of 1940 quorum standard and emphasized proxy voting authority's importance in serving the fund's interest.