TheCorporateCounsel.net

Yesterday, the SEC extended the comment period for its controversial climate change disclosure proposal to June 17th. The comment period was scheduled to expire on May 20th, and as Dave blogged a few weeks ago, the SEC has been taking a lot of heat over the relatively brief length of the comment period originally established for the proposal. The SEC’s press release also announced the reopening of the comment period for the SEC’s proposed overhaul of private fund advisor rules & its recent proposal regarding the definition of an “exchange” and amendments to Regulation ATS (Reg ATS). The comment period for these proposals will expire 30 days following publication of the reopening release in the Federal Register.

These latter two proposals – which combined exceed 900 pages – originally provided for a 30-day comment period. As with the climate change proposals, the SEC took some heat here over the length of the original comment period. Check out this rather pointed excerpt from the American Securities Association’s comment letter on the private fund advisors proposal:

The Proposal is just one of the many complex and consequential rulemakings the SEC has proposed in recent months. To date, the SEC has proposed sixteen new rulemakings, in addition to several others that were proposed at the end of 2021. Most of these proposals run to hundreds of pages in length, and often include hundreds of questions that commenters must consider when assessing the impact of potential new rules.

The Proposal itself is 342 pages and includes several very specific questions, some of which hint at further mandates that are not fully explored or analyzed in the release. Yet the SEC provided the public only thirty (30) days to comment on the Proposal. This is simply an inadequate amount of time for the public to properly consider how the contents of the Proposal will affect the U.S. securities markets – particularly when many entities are simultaneously considering and developing comments on over a dozen other rulemakings from the SEC, trying to navigate unprecedented market volatility.

We haven’t covered the Reg ATS proposal here, but crypto-world is freaking out about it, and the ASA submitted an identical critique concerning the length of the comment period for that proposal.

It’s hard to say whether the SEC’s action represents a broad retreat from its recent preference for short comment periods, but it appears that the SEC recognized that adopting short comment periods for these lengthy, intricate & controversial rule proposals wasn’t a good look – and it deserves some credit for the decision to extend them.

I’m sure it won’t escape the watchful eye of conspiracy theorists that the expiration date of the climate change proposal’s comment period now coincides with the 50th anniversary of the Watergate break-in. However, as a Cleveland Browns fan, I prefer to note that it also coincides with the 28th birthday of the team’s recently acquired WR, Amari Cooper.

– John Jenkins