U.S. House Committee urges SEC to pause rulemaking, cites lack of comprehensive analysis – Cryptopolitan

Ahead of today’s hearing, the U.S. House Committee—led by Chairman Patrick McHenry(NC-10)— sent a letter to Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC). 

The Committee expressed deep concerns over the SEC’s current rulemaking process. The letter specifically criticized the SEC for its failure to consider stakeholder feedback. Moreover, it noted the absence of thorough economic analysis in the Commission’s recent decisions.

Additionally, the Committee accused the SEC of considering rules in a “siloed fashion.” This approach, the Committee argues, fails to assess the cumulative impact of various rules on investors and the U.S. capital markets. Consequently, the Committee has called for a halt in the SEC’s rulemaking activities. They insist that the Commission should not finalize or implement any rule until it evaluates the real and cumulative impact, including the impact on competition.

Concerns over “aggressive agenda” and shortened timelines

Significantly, the Committee’s letter also highlighted the SEC’s “aggressive agenda” and shortened comment periods. These factors, they claim, have led to reduced feedback during the rulemaking process. Insufficient time for staff research and analysis has also been a fallout of this hurried approach. The Committee cited an October 2022 Inspector General’s Statement that echoed these concerns among Commission staff.

Furthermore, the Department of Justice has raised similar concerns. The Department submitted a comment letter emphasizing the need to assess the potential interactions of substantial, often interlocking proposals. The Committee’s letter also revealed that many of the SEC’s proposals revolve around three critical areas: private funds, equity market structure, and corporate governance. The interconnectedness of these areas demands a comprehensive evaluation of their cumulative effects.

Hence, the Committee has recommended that the SEC conduct a comprehensive cost-benefit analysis. This analysis should focus on the aggregate impact of rules in the aforementioned categories. Additionally, the SEC should propose a reasonable, workable, and staggered schedule for public comment on adopting and implementing these proposals.

Four House Financial Services Committee members, including Rep. Tom Emmer, who holds a position of majority whip in the House leadership, have recently urged the Securities and Exchange Commission (SEC) to approve the applications for exchange-traded funds (ETFs). This appeal came before today’s hearing, where the committee members are expected to discuss the matter further with the relevant authorities.