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U.S. SEC Regulatory Outlook For 2012: Complex Issues, Congress, Elections Likely To Bog Down Rulemaking Agenda

Publication Date: 
February 07, 2012
Source: 
World Securities Report - BNA
Author: 
Yin Wilczek

Professor Joseph A. Grundfest spoke with Yin Wilczek of World Securities Report about the lingering impact that the 2011 case on the SEC's federal proxy access rule continues to have on regulatory agencies.

The U.S. Securities and Exchange Commission enters 2012 with an ambitious regulatory agenda that likely will be delayed—and possibly derailed—by rulemaking complexities, the enhanced focus on cost-benefit analysis, congressional pushback, and an election year, attorneys, academics, and industry representatives said.

The SEC this year will attempt to push through some of the most complex and controversial regulations required by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. These include requirements for derivatives, asset-backed securities, specialized disclosures, executive compensation, and credit ratings.

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“The SEC will, for many years, have to live under the shadow of the D.C. Circuit's ruling in the proxy access case,” said former SEC commissioner Joseph Grundfest, now a law professor at Stanford University. “That decision raises myriad questions regarding the cost-benefit showing necessary for all Dodd-Frank rules to pass muster, and all regulatory agencies are struggling to figure out precisely how to comply.”

Similarly, Arthur Laby, a professor at Rutgers School of Law, told Bloomberg BNA that cost-benefit analysis has become “a dominant, if not the controlling, variable” in SEC rulemaking.

“After the proxy access decision last summer, I doubt that the SEC would move forward with any significant discretionary rulemaking absent a high degree of confidence that its cost-benefit analysis will withstand a court's scrutiny.”

“The SEC will, for many years, have to live under the shadow of the D.C. Circuit's ruling in the proxy access case.”