The Hill: Too much, too quickly from the SEC
Too much, too quickly from the U.S. Securities and Exchange Commission. Read SIFMA president and CEO Ken Bentsen's piece for The Hill…
The Securities and Exchange Commission proposed 32 major new rules in just 11 months ending August 2022 and is preparing at least another 19 for release in the next year.
Rushing to implement dozens of complex and far-reaching new regulations simultaneously absent prioritization, coordination, and robust cost-benefit analysis is not conducive to effective, enduring policymaking. And amid inflation, rising interest rates, and geopolitical uncertainty, it risks harming those whose financial security relies on strong capital markets – from workers to retirees, homeowners to business owners, and young families saving for the future to seniors living on a fixed income.
Our capital markets affect nearly every aspect of our lives. The financing and investment opportunities available through capital markets:
The U.S. securities markets are the deepest and most liquid in the world. They are also among the most regulated sectors of the U.S. economy. Therefore, it is critical that regulators tailor their interventions to address a market failure without unnecessarily harming or disrupting markets, especially when our economy faces serious headwinds. However, the high volume and speed of regulatory change at the SEC could result in negative consequences for the real economy in terms of output, employment, investment, and prices.
Learn more about the historic scale and scope of the SEC’s regulatory agenda.
Regulators should ensure their rules keep pace with markets, but transformative changes must be thoughtfully crafted and fully vetted for indirect costs and cumulative effects, particularly at a time of economic stress and uncertainty.
Unfortunately, the SEC is taking a very different approach with its flood of new regulatory actions that would make far-reaching changes to trading practices in every asset class under its jurisdiction.
Congress requires the SEC to conduct an economic impact analysis while developing each new rule to identify and assess its likely costs and benefits. However, the accelerated tempo of rulemaking runs the risk of undercutting the ability of SEC staff to carry out this responsibility in a thorough and balanced manner, leading to two common flaws in the economic analysis of new rules.
First, the SEC fails to consider the cumulative effects or cross-market implications between related proposals.
Second, the SEC focuses predominantly on the direct implementation costs while omitting or significantly underestimating the indirect costs.
Continuing on the SEC’s current trajectory could lead to ineffective and harmful regulations that do not advance its mission. Rushing to finalize its rule proposals as hastily as they were proposed could cause significant disruption to the capital markets and the broader economy that could negatively impact Main Street investors, retirees, and the employees and customers of American businesses.
There’s a better way to regulate our capital markets that focuses resources on the most time-sensitive priorities, conducts more robust economic analysis that accounts for cumulative and overlapping effects before moving forward with the most problematic proposals, and prioritizes transparency and public engagement.
Our capital markets are too important, and our economy is facing too many challenges, for the SEC not to get this right.
Pennsylvania + Wall
Too much, too quickly from the U.S. Securities and Exchange Commission. Read SIFMA president and CEO Ken Bentsen's piece for The Hill…
Letters
SIFMA along with other associations submitted a joint letter to the Securities and Exchange Commission (SEC) regarding the need for…
Pennsylvania + Wall
Recently, the Securities and Exchange Commission (SEC) has embarked on a wide-ranging and ambitious agenda to significantly change existing market…
Back to SEC Rulemaking Agenda
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