In the lead-up to SEC Gary Gensler’s testimony before the House Financial Services Committee, the Republican leadership has sent a scathing letter criticizing the “cumulative impact” of the SEC’s rulemakings under Gensler’s leadership.
The letter, distributed moments before the hearing, demands that Gensler halt the finalization or implementation of interrelated rulemakings until their overall effects can be evaluated. The leadership argues that the public and market participants need sufficient time to respond and comply with these new regulations, and the SEC should take this into consideration.
To support their argument, the Republicans refer to a report published by the Inspector General in 2022, which criticized the management of the SEC and raised concerns about the aggressive rulemaking pursued by Gensler. The letter claims that Gensler’s leadership has overwhelmed the public by not allowing them enough time to evaluate proposals and provide meaningful input, due to the sheer number and interconnectedness of the Commission’s agenda.
Furthermore, the Republicans highlight the negative economic impact of these rulemakings, particularly for smaller firms. They assert that these firms are facing “staggering costs” that are taking a toll on the economy.
In light of these concerns, the Republicans request that the SEC carries out a comprehensive cost-benefit analysis to evaluate the aggregate impact of the rules in question. They also call for public comment on this analysis. Additionally, the Republicans ask the SEC to propose a reasonable and staggered schedule for public comment on the adoption and implementation of these proposals. The Republicans emphasize the need to consider the overlapping nature of these regulations, as well as the significant compliance and operational burdens they may impose, especially on smaller or emerging firms.
Overall, the Republican leadership is urging Chair Gensler and the SEC to address the consequences of their rulemakings, assess their impact on the economy, and allow for more effective public input and compliance with these regulations.
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