Bills
| 3.23.22

Having the Securities and Exchange Commission Examine Whether Its Major Regulations Are Necessary (H.R. 2354)

Do you support or oppose this bill?

What is H.R. 2354?

(Updated November 21, 2017)

This bill would require the Securities and Exchange Commission (SEC) to review all significant SEC rules and regulations within the first five years of this legislation’s enactment, and every 10 years thereafter. In doing so, the SEC would assess whether each regulation is outmoded, ineffective, insufficient, or excessively burdensome -- or if it is no longer in the public interest.


The SEC would also be directed to solicit public comment regarding regulations it has determined is unnecessary for the reasons listed above, in an effort to determine if the regulation in question should be improved or modernized, or simply repealed outright.

Within 45 days of any final SEC vote, the SEC will provide a report to relevant congressional committees detailing the results of the vote and any subsequent actions to be taken.

Argument in favor

It isn’t too much to expect the SEC to review the effectiveness and necessity of its regulations every 10 years -- doing so gives them the opportunity to update or eliminate outdated regulations. This is something that regulators are already doing.

Argument opposed

This bill essentially declares that it should be open season on SEC regulations once every 10 years, and if it passes it could inhibit the agency’s ability to focus on its real job during these review periods -- potentially setting the stage for financial crisis.

Impact

Individuals and businesses affected by outdated SEC regulations, members of the public who wish to comment on SEC regulations.

Cost of H.R. 2354

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Rep. Robert Hurt (R-VA), the sponsor of this legislation, pointed out that:

“The SEC is not presently required to conduct comprehensive, retrospective review of its regulations, meaning that outdated and duplicative rules may be left on the books without being modernized.”

He also added that reviewing existing regulations is “a process that other financial regulatory bodies already perform -- to streamline their rules and ensure they are all up-to-date.”

The lead cosponsor of this legislation, Rep. Kyrsten Sinema (D-AZ), says that she has been told by Arizona business owners that the “inefficient and often confusing regulatory environment hurts their ability to grow and hire.”

This bill was approved by the House Financial Services Committee by a vote of 41 to 16, and was introduced as a bipartisan collaboration between Reps. Hurt and Sinema.


Of Note: Another major federal regulator of the financial sector, the Financial Industry Regulatory Authority (FINRA), has commenced a retrospective review of its own regulations -- as alluded to by Reps. Hurt and Sinema. Robert Colby, the Chief Legal Officer of FINRA, said that:

“FINRA believes it is important to look back at its significant rulemakings to determine whether those rules and rule sets are meeting their intended investor-protection objectives by reasonably efficient means.”

Media:

Summary by Eric Revell
(Photo Credit: Flickr user puuikibeach)