Oct 28 2022

WASHINGTON, D.C. – U.S. Senators Thom Tillis (R-NC), Mike Crapo (R-ID), Tim Scott (R-SC), Mike Rounds (R-SD), Bill Hagerty (R-TN), and Steve Daines (R-MT) recently sent a letter to U.S. Securities and Exchange Commission(SEC) Chairman Gary Gensler questioning the operational integrity of the SEC following the recent release of the SEC Inspector General’s Statement on the SEC’s Management and Performance Challenges. Specifically, the report outlined a number of serious and systemic management issues that, if unaddressed, could significantly impact the ability of the SEC to effectively regulate U.S. markets.

The senators wrote, “As you are well aware, the report was submitted to your office on October 13, 2022. This statutorily-required and non-biased report is designed to identify the ‘most serious management and performance challenges facing the SEC.’ Unfortunately, portions of the report detail grave deficiencies within the SEC, especially pertaining to its workforce, level of rulemaking experience, and the length of public comment periods. Cumulatively, these deficiencies make it hard to understand how the SEC is adequately performing the necessary due-diligence and analysis required for its many pending rules.”

The senators continued, “Since the beginning of this year through August 29, 2022, the final date the report covers, the SEC introduced twenty-six new rule proposals.  At over three rules per month, the twenty-six rules of 2022 are more than double the number introduced in the entirety of 2021 and the highest total in each of the past five years. Despite many outside groups repeatedly requesting the SEC slow its rulemaking tempo to ensure proper time for stakeholder feedback and deliberation, you publicly shrugged-off these concerns by characterizing the rulemaking pace under your leadership as ‘right in the zone’ of your predecessors.”

“America’s public securities markets are the envy of the world, serving as tremendous sources of opportunity for businesses and individual Americans alike. Moreover, given the growing bifurcation of international markets and the rise of peer and near-peer competitors across the globe, it is imperative that the SEC works to ensure all regulatory actions it undertakes are well-conceived and allow U.S. markets to maintain their strategic edge. Any efforts to ram through hurried rulemaking without proper analysis, deliberation or consideration of downstream negative impacts is nothing short of regulatory malpractice. Instead, the SEC should focus on ensuring it meets its mission requirements to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation,” the senators concluded. 

Read the full letter here