October 16, 2017

What If the Reg Flex Agenda Became “Real”?

One of the things that I’ve blogged about more than I would like is how the Reg Flex Agenda is merely aspirational – and people should pay little mind to it (here’s one of my more recent entries). History certainly has borne out the truth – I imagine the SEC has missed it’s predicted timetables for rulemakings listed in the Reg Flex Agenda many more times than not. And not that there’s anything wrong with that, it’s always been viewed as a meaningless regulatory exercise for those “in the know.”

But now – probably due to all the Congressional & media attention being paid to it – SEC Chair Clayton recently told the Senate Banking Committee that he intends to make the Reg Flex Agenda more realistic, including streamlining it (see this Cooley blog).

Kudos if the SEC can pull it off. But I worry that by promising to make deadlines, the SEC is placing a bullseye upon itself. In recent years, the Staff has smartly avoided mentioning any “hard” time frames for conducting rulemaking. That’s because it’s nearly impossible to predict when a rulemaking will come out, even when you’re the one actually writing the rules! It’s difficult to even predict which season of the year it will happen.

There’s a myriad of review layers within the SEC, including:

1. Your superiors within your Division (and there might be quite a few of those)
2. The folks within the SEC’s Office of General Counsel
3. That ever-growing newish Division of Economic & Risk Analysis (DERA)
4. Each Commissioner (and their counsels)
5. Possibly other Divisions or Offices within the SEC, depending on the nature of the rulemaking
6. Possibly members of Congress (or their staff) if it’s a politically-sensitive topic

You think its tough getting your proxy through an internal review? That’s nothing. A proposing/adopting release can easily go through 20 drafts. Anyway, I draw your attention to the transcript of one of my favorite webcasts if you want to learn more: “How the SEC Really Works“…

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Broc Romanek