On Monday, the U.S. Securities and Exchange Commission (SEC) announced a significant policy change, withdrawing the enforcement staff’s ability to initiate investigations independently. This move reverses a delegation of power granted in 2009, which had allowed the head of enforcement to issue formal investigative orders, such as subpoenas, without needing the commission’s prior approval.

The SEC stated that this change aims to better align the agency’s investigative resources with its overall priorities. According to a notice on the SEC’s website, the adjustment is set to take effect 30 days after its publication in the Federal Register.

Previously, SEC lawyers had been informed that they must seek consent from the commission’s politically-appointed leaders before issuing such orders. However, it was unclear if the Commission had formally voted on this policy change until now.

The SEC’s spokesperson highlighted the significance of this revision in an emailed statement: "We are returning to how the Division operated for most of its existence, ensuring the Commission has the utmost insight into the cases we bring throughout the process." This statement underscores the agency’s commitment to maintaining close oversight of its enforcement actions.

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