ICI Criticizes SEC's Rush of Rulemaking
Commentary by Steven Lofchie
Eric J. Pan, President and CEO of the Investment Company Institute ("ICI"), expressed dismay with a rapid and seemingly disjointed approach to SEC rulemaking.
In an ICI Viewpoints article titled "The SEC’s Multi-Rule Pileup," Mr. Pan asserted that the SEC, under Chair Gensler's leadership, initiated an unprecedented expansion of its jurisdiction with 46 new rules proposed since 2021. This reflected, he said, a stark increase from previous administrations. Further, Mr. Pan asserted that the proposed rules are being implemented without Congressional support and have raised bipartisan alarms on Capitol Hill for their potential impact on "market integrity" and "investor safety."
Mr. Pan strongly criticized the SEC's current approach, arguing that the SEC has not performed a comprehensive evaluation of proposed rules, their interconnectedness and their economic impact. He said that this could lead to increased compliance costs for retail investors. He also stated that the shortened comment periods hinder companies from assessing their cumulative effects, potentially ignoring real-world challenges. Stressing the need for a thorough assessment before making significant financial market changes, he emphasized that: "[t]his is about whether these regulations will actually serve their intended purpose and whether they will produce greater harm."
Commentary
If ICI, which is largely the investment vehicle for retail investors, finds the rulemakings too much, perhaps the SEC should take that as a strong signal that it really is too much.
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