SIFMA Executives Criticize "Aggressive Rulemaking Agenda" at SEC

In its Pennsylvania + Wall Blog, SIFMA legal and research executives criticized the SEC for its aggressive rulemaking agenda during a time of high inflation, rising interest rates and significant geopolitical events that could adversely affect the real economy.

The Managing Director of the SIFMA Office of General Counsel, Managing Director in the SIFMA Capital Markets Group, and Chief Economist and Head of Policy Research at the Financial Services Forum stated that the SEC issued 16 rule proposals in the first quarter of 2022, none of which were in response to financial crises. (This contrasted with the 17 new rules following the global financial crisis and the 16 new rules following the Enron and WorldCom scandals.) The executives also criticized the SEC's shortened public comment periods under these rulemakings, noting that the agency under Chair Gary Gensler "provided 60-day comment periods only 7% of the time" with an average of only 38 days for public comment. The SIFMA executives highlighted that the simultaneous and accelerated implementation of these rules hinders the SEC's ability to thoroughly analyze these proposals and that the SEC's rulemaking agenda "will lead to harmful unintended consequences."

In addition, SIFMA executives asserted that the volume and rate of these rule changes create "significant risk." They warned that an increase in economic and regulatory policy uncertainty hurts economic performance in that regulatory uncertainty prompts reluctance by investors, firms and other market participants from investing in securities and bonds and making it more difficult to raise capital.

SIFMA executives encouraged the SEC to (i) limit its rulemaking agenda to only the most "pressing regulatory issues that support market resilience" and (ii) allow for more time for markets and investors to embrace the impact of new rule changes.

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