25 Associations Press US SEC for Longer Comment Periods, APA Compliance for Rulemakings

In an April 5, 2022 letter, 25 trade associations jointly criticized recent US Securities and Exchange Commission (SEC) rulemakings and requested that the SEC provide longer, more appropriate comment periods (and more meaningful opportunity for comment-making) for its “ambitious” regulatory agenda.

Noting over 50 substantive areas of current SEC rulemaking efforts and that many affected or otherwise interested parties are regulated by other regulatory agencies (with their own related rulemaking and other regulatory activities), the associations explained that the SEC’s current approach deviates from case law, applicable federal standards (including the Administrative Procedure Act (APA)) and related guidance of appropriate rulemaking procedure and that it “significantly” diverges from recent SEC process under several previous chairs.

The letter also offered a truncated list of current or recent rulemaking proposals or requests for information (RFIs) and noted that for these “commenters will have to review and analyze roughly 3,570 pages and respond to roughly 2,260 individually identified questions and several broad catch-all requests for comment.”

The associations requested that the SEC consider what is an appropriate comment period for each rulemaking relative to its complexity and the SEC’s overall regulatory agenda and to not “reflexively” assign 30- or 60-day comment periods, noting that “needlessly short” comment periods risk harm to the SEC’s “tripartite mission”—namely, “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”