In yesterday’s blog, I mentioned how the relatively short comment periods contemplated for the SEC’s recent rulemaking proposals have drawn some attention, even though delays in publishing the proposing releases may ultimately frustrate plans to rush those rulemakings through the process. Interestingly enough, Patrick McHenry (R-NC), the Ranking Member of the House Committee on Financial Services, and Pat Toomey (R-PA), the Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, also took notice of the SEC’s comment periods, sending a letter yesterday to Chair Gensler expressing concern that “rulemakings under your tenure have consistently provided unreasonably short comment periods, which will harm the quality of public comment and may run afoul of the Administrative Procedures Act.” The letter notes that the Administrative Conference of the United States, an independent federal agency charged with recommending improvements to administrative process and procedure, endorses a comment period of at least 60 days for significant regulatory actions.
Congressman McHenry and Senator Toomey urge Chair Gensler to immediately extend all comment periods for the SEC’s proposed “rules of significance” to at least 60 days, including “reopening the comment filing for those rulemakings with shorter comment periods that have closed prematurely.” They request a response by January 24, 2022.
One thing I would note in this context is that the SEC does not actually stop accepting comments when the “deadline” for comments has passed. The comment file remains open, and comments are accepted, up to the time that final rules are adopted. In fact, in my experience of both working on many comment letters over the years and working on rulemaking at the SEC, the Staff that is working on the rulemaking continues to consider any comments that come in after the deadline whenever it is possible to do so. The reality is that no matter how long you make the comment period for a proposed rulemaking, it is still going to be difficult to solicit meaningful comments from the public, and from the perspective of those preparing the comments for the SEC, it is always going to be difficult to prepare thoughtful comments in a timely manner unless you have people dedicated to doing so. So, in the end, the SEC Staff working on the rulemaking and the individuals and groups that provide the comments are just doing the best they can in the time allotted.
– Dave Lynn