WASHINGTON–U.S. Senator John Boozman (R-AR) is calling on the U.S. Securities and Exchange Commission (SEC) Office of Inspector General to investigate the agency’s rulemaking process under Chairman Gary Gensler.
“Healthy markets need clear rules to the road, and agencies need to hear input from market participants of all sizes,” Boozman said. “By issuing an unprecedented high volume of proposals, providing short comment periods, and passing the buck on economic analyses, the SEC has made it hard for small market participants to have a seat at the table.”
Boozman also led fellow Senate Republicans in a letter to Acting Inspector General Helen Albert where they emphasized the SEC’s “aggressive regulatory agenda” and their concerns the agency is limiting market participants’ ability to understand rules by shortcutting “its analyses of the economic impact of proposals and shortchanging commenters with truncated comment periods.” The senators also raised questions about the extent of career staff involvement in the rulemaking process.
“The inadequacies of the economic analyses of the SEC’s recent notices of proposed rulemaking raise concerns that the SEC’s political leadership may be sidelining the agency’s career staff as they pursue an expedited rulemaking agenda,” the senator wrote.
The senators requested an audit of the SEC’s rulemaking activity and answers to three key questions about its current practices:
- Why the inconsistency in length of comment periods, and to what extent have these shortened windows potentially limited meaningful public comment?
- How has the lack of rulemaking experience affected the SEC’s and regulated entities’ ability to assess the impact the SEC’s proposed rules will have on competition, efficiency, and capital formation?
- To what extent the SEC’s political leadership underutilizes the expertise of its career staff in formulating proposed rules?
The scale and magnitude of rulemaking proposals under Chairman Gensler has been unprecedented. In the first six months of 2022, the SEC published 20 notices of proposed rulemaking with an average of comment period of 43 days. This is insufficient time for businesses to meaningfully weigh in, understand potential changes and implement compliance measures.
The letter was also signed by Senators Bill Hagerty (R-TN), Mike Crapo (R-ID), Steve Daines (R-MT) and Katie Britt (R-AL).
The full letter can be found here.