By Elena Eyber, J.D.
The Securities Industry and Financial Markets Association (SIFMA), the Investment Adviser Association (IAA), along with other Associations, sent a joint letter to the SEC Chair Gary Gensler regarding the need for sufficient comment periods, cost benefit analysis and meaningful public input in the regulatory rulemaking process. The Associations are concerned that meaningful public input into the rulemaking process is at risk of being lost in the SEC’s current rulemaking agenda. The Associations pointed out that short comment periods run the risk of giving the impression that the SEC has already made up its mind on a particular issue. This is a risk easily mitigated by the SEC by providing commenters with ample opportunity to review, analyze, and comment on proposed rules. The Associations stressed that they stand ready to work with the SEC to provide investors with a thoughtful and well-tailored regulatory regime.
Current approach to comment period length. The Associations stated that the SEC’s current approach to setting the comment periods for its numerous rule proposals not only deviates from case law, federal standards, and guidance on appropriate rulemaking procedure, but also, significantly deviates from the SEC’s recent approach to this process. A recent study of SEC comment periods found that there have been more 30-day comment periods in the last year than there were during the prior seven years and that under several recent SEC Chairs the vast majority of comment periods were 60-days or more.
Setting the length of comment periods. The Associations request that the SEC in each rulemaking consider what is an appropriate comment period length for that particular proposal relative to its complexity and the SEC’s overall rulemaking agenda. The Associations do not believe it is prudent to reflexively assign a 30-day or 60-day comment period to all rule proposals.