House Oversight Chair Questions if SEC Staff Guidance on Economic Analysis Should Apply to PCAOB and FINRA Regulations
By Jim Hamilton
In recent hearings before his Financial Services Oversight subcommittee, Chairman Patrick McHenry (R-NC) questioned whether the PCAOB and FINRA should be subject to the same SEC staff guidance on the application of economic analysis that applies to SEC rulemaking. While acknowledging that there could be some categories of regulations where the guidance could be applied to SROs, such as rules having a major profound impact, SEC Chairman Mary Schapiro noted that many SRO rules take effect immediately. Moreover, a full-blown economic analysis of SRO rules could defeat the streamlining of SRO rulemaking effected by the Dodd-Frank Act. Moreover, a blanket economic analysis requirement would be a mistake, she noted, since many SRO rules are routine and operational.
In her prepared testimony before the McHenry Committee, Chairman Schapiro emphasized that high-quality economic analysis is an essential part of SEC rulemaking since it helps ensure that decisions to propose and adopt regulations are informed by the best available information about their likely impact. The Guidance referred to by Chairman McHenry was developed by the SEC Division of Risk, Strategy and Financial Innovation and the Office of General Counsel and distributed to the leadership of the Commission?s rule writing Divisions and Offices in mid-March, and recently published on the SEC?s website. Chairman Schapiro has expressly directed SEC rulewriters to follow the Guidance and has solicited input from the Commissioners with the goal of developing a version of the Guidance that can win the approval of the full Commission.
FINRA Releases Guidance on Reg D Offering Duties FINRA announced the publication of guidance for FINRA-registered firms about their obligations regarding customer suitability, disclosures and other requirements for selling private placements to customers...
PCAOB Withstands Constitutional Challenge So ruled the DC Circuit in Free Enterprise Fund v. PCAOB (D.C. Cir. Aug. 22, 2008). By a 2-1 decision, the D.C. Circuit held that Title I of the Sarbanes-Oxley Act, which created the Public Company Accounting Oversight Board (PCAOB),...