Monday, July 11, 2011

President Issues Executive Order Asking SEC, CFTC and Other Independent Agencies to Identify Excessively Burdensome Regulations

In an Executive Order issued July 11, 2011, President Obama has asked the SEC, CFTC and other independent federal regulatory agencies to follow the key cost-saving, burden-reducing principles when proposing and adopting regulations as outlined in his January Executive Order 13563 to executive agencies. The July Executive Order also asks the independent agencies to analyze their existing regulations to identify any outmoded or excessively burdensome regulations.

The July Executive Order states as policy that wise regulatory decisions depend on a careful analysis of the likely consequences of regulation, informed and improved by meaningful public participation, after consideration of their quantitative and qualitative costs and benefits.

Further, the July Executive Order directs the SEC, CFTC and other independent regulatory agencies to consider how best to promote retrospective analysis of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Such retrospective analyses, including supporting data and evaluations, should be released online whenever possible.

Also, within 120 days of the date of the order, each independent regulatory agency should develop and release to the public a plan under which the agency will periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.

Executive Order No. 13563, directed to executive agencies, was meant to produce a regulatory system that protects public health, welfare, safety, and the environment while promoting economic growth, innovation, competitiveness, and job creation. The July Executive Order states that independent regulatory agencies should also promote that goal. Executive Order 13563 set out general requirements directed to executive agencies concerning public participation, integration and innovation, and flexible approaches. The July Executive Order says that the SEC, CFTC and other independent regulatory agencies should comply with these provisions as well.

On integration and innovation, Executive Order No. 13563 noting that some industries face a significant number of possible redundant or inconsistent regulations, stated that greater coordination across agencies could reduce these requirements, thus reducing costs and harmonizing rules. In developing regulations, each agency must attempt to promote such coordination and harmonization; and also identify means to achieve regulatory goals that are designed to promote innovation. On flexibility, agencies must identify and consider regulations that reduce burdens and maintain flexibility and freedom of choice for the public. These approaches include warnings, appropriate default rules, and disclosure requirements as well as provision of information to the public in a form that is clear and intelligible.

On public participation, Executive Order No. 13563 directs agencies to afford the public a meaningful opportunity to comment through the Internet on any proposed regulation, with a comment period that should generally be at least 60 days. Also regulations must be based, to the extent feasible and consistent with law, on the open exchange of information and perspectives among State, local, and tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole.