Cost benefit analysis sill an issue with SEC rules
One of the biggest gifts to opponents of Dodd-Frank was the court decision from the U.S. Court of Appeals in Washington D.C. in July 2011 that struck down the so-called proxy access provisions of the law. The reason was that the SEC did not conduct an adequate cost benefit analysis of the provisions and the impact.
The Dodd-Frank rule was hailed as a milestone in the long battle by corporate governance and shareholder advocates to open up access to proxy ballots. The appellate decision, which the SEC did not fight, was a turning point in the fight against one of the most controversial regulations in recent memory.
The decision has proved to be the gift that keeps on giving, as the approach was embraced by opponents of other aspects of the law. The go-to legal strategy was to contest various provisions on the ground that adequate cost-benefit analyses had similarly not been adequately performed.
This issue is relevant again in light of a recent bill that requires the SEC to conduct more thorough analysis on rule-makings.
The bill passed the House with bipartisan support but has virtually no chance of passage in the Senate. That said, the argument is alive and well legally. Opponents of regulations will certainly embrace the approach in the near future. We may well hear it all over again when it comes to the controversial derivatives rules.
- here's the article