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SEC Gears Up for Flood of Rulemaking To Follow Passage of Dodd-Frank Act

(The following post originally appeared on ONSecurities, a top Minnesota legal blog founded by Martin Rosenbaum to address securities, governance and compensation issues facing public companies.)

July 15, 2010

The Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act today and sent it to President Obama for his signature, expected next week. The Act includes numerous governance and compensation provisions that will affect all public companies, as well as comprehensive reform of the nation’s financial system.

In the Wall Street Journal, Kara Scannell reported this week that the SEC is gearing up for a heavy dose of rulemaking. In a story titled “SEC Enters Overdrive to Prepare for Overhaul” (subscription required for entire article), Scannell reported that the SEC is “on a tight deadline to write more than 90 new rules and complete nearly 20 studies.”

The story reports that the rulemaking process will be “burdensome” and will delay other initiatives the SEC considers important. For example, the SEC staff was engaged in a comprehensive review of public companies’ disclosure requirements, a process that will likely have to be put on hold. However, SEC officials say that they “remain committed” to adopt the proposed proxy access rules, as well as dozens of rules for which the timing is mandated by the Act. To prepare for the rulemaking, “ . . . the SEC’s divisions have assembled teams to tackle the various issues, and 50 to 100 staffers are involved in the preparations.”

The situation reminds me of the time after passage of the Sarbanes-Oxley Act of 2002, when we were waiting for new SEC rules issued every few weeks. The next several months promise to be very interesting.

What’s on a Page? Right Now, Not Much . . .

I’m getting a little tired of dealing with the Dodd-Frank Act and various alternative Congressional bills that have been more than 1,000 pages each. Of course, it’s easy to run up a lot of pages when each page has huge margins and one narrow column of text down the middle of the page. Who came up with that system anyway – do people really write lots of margin notes on each of 2,323 pages? Hopefully, after the Act is finally passed, there will be a version with more text on each page. Who knows – maybe it will only take up 800 or 900 pages.


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