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To support the sharing of nonpublic information about regulated products and possible violations of law, the SEC and FDA signed a three-year memorandum of understanding.
The memorandum of understanding took effect Aug. 31 and supports the agencies in exercising their existing oversight authority, but does not signal a new disclosure rule, investigation or enforcement action.
The agreement also allowed the Securities and Exchange Commission to use information submitted to the FDA in filing reviews, investigations, proceedings and civil actions and allowed the regulators to compare information disclosed to investors with information filed to the FDA.
Announcements of clinical trial results, FDA submission, regulatory review, and product approval for public biotech, pharmaceutical, medical-device and healthcare companies can cause share prices to go up or down based on commercial opportunity.
The MOU covers statements from the FDA, including the reviews, approval, and results of clinical trials. SEC Chairman Paul Atkins has said that FDA disclosures can materially affect markets. Acting FDA Commissioner Kyle Diamantas said the quicker exchanges should improve transparency in the life sciences and help protect patients’ and the public’s trust.
Both regulators will develop a process for requesting and exchanging nonpublic records. Requests for nonpublic records must identify the information sought and the intended use of the information and obtain agency consent. SEC contacts include its Division of Enforcement and Division of Corporation Finance, while FDA contacts include its Office of the Chief Counsel.
The FDA may provide the SEC with nonpublic records, subject to federal law. The SEC may not provide nonpublic FDA records to any other party without FDA’s written consent. The FDA may only receive nonpublic SEC records after promising not to disclose them.
The information must not be public, the agencies exchanged the information, and this does not waive any privilege. This does not apply to a request under public records law or a subpoena or testimony. It applies only to requests made after Aug. 31.
The SEC might use the MOU to compare earnings release, securities filing, and investor presentation statements to FDA records. Material discrepancies could add questions, more scrutiny of filings, or start an enforcement investigation, but the MOU does not guarantee additional cases would be pursued.
No agency power is created by the agreement, which can be terminated on 30 days’ notice by either agency. Extensions or amendments require mutual written agreement and implementation is subject to available staff, funding and other re
The agreement will last until August 2029 unless extended, and its impact will depend on whether the SEC and FDA make regular use of the new channels for filings, referrals and investigations.
Source: <a href="https://bitcoinfoundation.org/news/regulation/sec-and-fda-sign-three-year-data-sharing-pact-to-tighten-market-oversight/” target=”_blank” rel=”nofollow noopener”>bitcoinfoundation.org