Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight, + Website

CHAPTER 11 How to Participate in the Regulatory Comment Process

While companies and firms faced with the myriad of oftentimes overlapping regulations are generally in a defensive posture with respect to examinations or Enforcement actions, there are ways in which companies can act in a proactive manner to attempt to change the regulatory guidelines to assist their businesses or reduce their liabilities. This can sometimes be accomplished through commenting on the regulatory rulemaking process.

11.1 DODD-FRANK RULEMAKING

Pursuant to the Dodd-Frank Act, federal Agencies, including the SEC and CFTC, have been charged with promulgating hundreds of rules to bring the Dodd-Frank Act to life and determine the intention of the statute and how it will be implemented. These rules, many of which are hundreds of pages long, carry the force and effect of law and impose requirements that are just as binding as those directly imposed by the statute.

The rulemaking process is, for the most part, a transparent one, which allows interested individuals and firms to impact the process by providing comments to the regulatory Agency to address the issues that are contained in the rules. In addition, once a rule has been finalized, affected parties are able to sue the promulgating Agency for acting arbitrarily, violating procedural requirements, or regulating beyond their statutory authority.

11.2 SEC RULEMAKING PROCESS

For the SEC, the rulemaking process involves the following several steps: ...