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SEC Chair Defends Rulemaking Process Before Senate Committee

S.J. Steinhardt
Published Date:
Sep 13, 2023

Securities and Exchange Commission (SEC) Chair Gary Gensler faced tough questioning from some Republican senators when he appeared before the U.S. Senate’s Banking, Housing, and Urban Affairs Committee on Sept. 12, The New York Times and The Wall Street Journal reported.

The Committee’s ranking member, Sen. Tim Scott (R-S.C.), accused Gensler of pushing through new securities rules without giving sufficient time for public comment or analyses of their economic impact.

“According to the Committee on Capital Markets, under your leadership, the SEC has put forward 47 proposals and adopted 22 of them in the first several months of your leadership,” Scott said in his opening statement. “What’s even more troubling is these rules stand to completely change our capital market structure, which benefits the average investor more today than at any other point in history. The breakneck pace [at which] you are pumping out regulations should not be applauded.”

“In the last two years, we have provided the public ample time to comment, with an average of 70 days to comment from the time a proposal is published on our website,"  Gensler said in his statement. "Since January 2022, we have provided a minimum of 60 days with some as long as 100-plus days from the day we a proposal is posted on our website. In the last two years, we also reopened 18 of our rules for further public comment. When comment periods close, we often continue to get additional comments, through meetings and otherwise, which staff has considered as well.”

Senators also singled out the SEC’s proposed rules on climate change disclosures by public companies for questioning. Under the proposal, some companies would have to report on Scope 3 emissions, indirect emissions caused by a company’s supply chain or customers. Companies have raised concerns about the potential compliance costs, and some business groups have complained that tracking those emissions would be burdensome and difficult to do accurately, the Journal reported.

Gensler told the committee that the SEC is focusing on Scope 3 reporting, the Journal reported, but he suggested that the Scope 3-related aspect of the proposal could be changed. 

“Really important issues have been raised around Scope 3,” he said, according to the Journal. “We’re going to have to think about what to do with so-called Scope 3.” 

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