SEC Chair Mary Jo White issued a response to the Senate Banking Committee’s November 30 letter cautioning federal agencies not to finalize pending rules during the departing administration’s last days. According to Chair White, many of the SEC’s planned initiatives are “ready for Commission consideration.” She stated her intention to move forward with them before the change in administrations.
Chair White referred to comparable post-election periods in the past. She noted that the SEC enacted a number of substantive rules during transition periods after the 2000 and 2008 elections. The SEC should not “deviate from its historical practice of independently carrying out its duties,” she said.
Chair White listed several items that were ready for an SEC vote, including the following:
- the adoption of rules to establish capital, margin and segregation requirements for security-based swap dealers and major security-based swap participants;
- the adoption of rules regarding recordkeeping, reporting and notification requirements for security-based swap dealers and major security-based swap participants;
- the adoption of rules regarding the orderly liquidation of certain broker dealers; and
- the adoption of Investment Company Act Rule 30e-3, which concerns an optional method for investment companies to use to transmit shareholder reports by web posting.
Lofchie Comment: How much of the letter is devoted to formalities and how much concerns important issues is difficult to say, since some of the proposed rules are not significant to market participants; e.g. the rules on orderly liquidation and shareholder reports. At least three new Commissioners will be joining the SEC in the next few months. Surely, it is appropriate to allow those Commissioners to decide for themselves whether to proceed with the swap dealer rules as proposed or to amend them. In other words, given that these rules have been years in the making, is there an urgent reason to adopt them before the new Commissioners are seated?