TheCorporateCounsel.net

With Labor Day now behind us marking the unofficial end of summer and the beginning of a sprint to election day, one may inevitably ask: “What are the prospects for SEC rulemaking activity as we approach the election and a new Administration?” As I have mentioned before, the conventional wisdom has always been that the SEC, like other government agencies, slows down its rulemaking activity as the Presidential election grows nearer, on the theory that agencies do not want to have controversial proposals interfere with election year politics, and agencies generally want to avoid the potential for a new rule to be invalidated under the Congressional Review Act, depending of course on the outcome of the election.

Certainly, the dynamics have changed a bit since I last addressed this topic in May, given that we now have two candidates for President that are not incumbents. When President Biden was still in the race, you had the possibility that the SEC Chair could continue in the role post-election if Biden was reelected, but now it is foreseeable that a Harris Administration would be more likely to make government-wide changes to cabinet and agency leadership (as would be the case with a Trump Administration, obviously). This dynamic undoubtedly puts more pressure on agencies such as the SEC to hold off on proceeding with their rulemaking agenda, given the significant degree of uncertainty as to the policy direction going forward.

While it is always possible that we could see a burst of SEC rulemaking in the coming months as we saw at the end of the Trump Administration, the quiet open meeting schedule over the summer seems to indicate that outcome is unlikely. This all may mean that public companies will not be scrambling to comply with new disclosure requirements during the upcoming proxy and annual reporting season as had been the case over the past few years.

– Dave Lynn