Toomey: Extend SEC Comment Period
In the first legitimate feedback posted to the SEC under the "Comments on Money Market Fund Reforms" page, Patrick McHenry of the House Committee on Financial Services, and Pat Toomey of the Senate Committee on Banking, Housing, and Urban Affairs submitted a letter to SEC Chair Gensler which comments, "We are concerned that the Securities and Exchange Commission (SEC) rulemakings under your tenure have consistently provided unreasonably short comment periods, which will harm the quality of public comment and may run afoul of the Administrative Procedure Act. The SEC should remedy this disturbing and unprecedented pattern -- which contradicts executive orders from both Democratic and Republican administrations meant to encourage deliberative rulemakings -- by extending the comment period of all proposed rulemakings that have been released during your time at the SEC. The notice-and-comment process is critical to effective SEC rulemaking. The opportunity to comment on proposed rulemakings ensures the public can provide substantive analysis, warn of unintended negative consequences, and suggest alternative approaches with rationale for the SEC to consider. This commentary helps refine and improve adopted rulemakings -- and in some cases provides a basis for the SEC to rethink or scrap imprudent rulemakings entirely." It continues, "`Moreover, properly scrutinizing a proposed rulemaking often requires a significant investment of time and resources. This is especially true when a proposal consists of several hundred pages and is intended to interact with complicated financial markets and existing securities laws. Truncated comment periods pose particular difficulties -- and are of particular concern -- when overlapping with holidays, year-end operational or regulatory obligations, or other times when commenters' staff are expected to manage other deadlines. `President Obama's White House appropriately recognized that public comment periods on most rulemakings should be at least 60 days. Extended comment periods, for example, for 90 days or 120 days, are also appropriate when taking up particularly complex rulemakings or when numerous rulemakings are simultaneously outstanding. The Administrative Conference of the United States, an independent federal agency within the executive branch charged with recommending improvements to administrative process and procedure, similarly endorses a comment period of at least 60 days for significant regulatory actions. Despite these recommended practices, the majority of SEC proposals put forward under your chairmanship have thus far allowed less than 60 days for public comment. Two proposals provide 60-day comment periods, three proposals provide 45-day comment periods, and six proposals provide 30-day comment periods. Moreover, several of these proposals with shorter comment periods coincide with federal holidays (Christmas, New Year's Day, and/or Martin Luther King Jr. Day) yet do not allot extra days in light of those holidays. While the money market fund reform proposal from last month provides a 60-day comment period, that is still an insufficient amount of time for such significant revisions to money market fund rules." Toomey and McHenry add, "We urge you to immediately extend all comment periods for the SEC's proposed rules of significance to at least 60 days, including reopening the comment filing for those rulemakings with shorter comment periods that have closed prematurely. Finally, we request that you extend the comment period on the money market fund rule revisions to at least a 90-day comment period, consistent with the process for the most recent prior significant substantive revisions to the money market fund rule. We request that you respond in writing to these requests by January 24, 2022. Included in your response should be an explanation of how you intend to take corrective action. Thank you in advance for your attention to this important matter."
