The economic ramifications of the proposal are not simple. The requirement that open-end funds hold a greater portion of their portfolios in highly liquid investments will force funds to keep more of their investments in cash and government securities, to hold more diversified portfolios and potentially to reduce their investments in small companies as the shares of such companies are less likely to be regarded as liquid under the SEC's standards. In short, the SEC's new proposals may reduce…

While the proxy disclosure requirements have attracted less attention than other SEC rule proposals, they may prove to be the most pernicious. The underlying danger is that the SEC will monitor the manner in which advisers vote and will cast a harsh eye on advisers that vote against governmentally-favored proposals. There is a reason that ballots for governmental offices are kept secret. The same potential for abuse exists with respect to proxy votes by advisers.

While there are…

Collecting outsized fines for violations does not evidence effective regulation. It demonstrates that the SEC is a powerful regulator and can impose its will.

Mr. Gensler's statement that the $1 billion in fines for recordkeeping violations were 10 times the level of previous fines for similar violations evidences a lack of proportionality between the underlying violation and the penalty (see ). At the end of the year, the SEC will publish its annual recap of its enforcement actions,…