TheCorporateCounsel.net

While there are a lot of advantages for the SEC in issuing guidance documents instead of adopting the most controversial aspects of proposed rules, there’s also a downside.  The ability to use agency guidance as a tool depends on the policy preferences of the folks running the agency, and those change with each change in administrations.

For instance, in 2018, former President Trump issued an executive order curbing the use of agency guidance by enhancing Congress’s ability to review and reject guidance documents. In turn, President Biden revoked that executive order on his first day in office. So, while guidance in lieu of rulemaking has its advantages, its downside is that it’s pretty easy to change with a change in the direction of the prevailing political winds.

Of course, the bigger issue is whether this is any way to run a railroad – but that one’s above my pay grade.

– John Jenkins