Less than halfway through the process of implementing the 2010 Dodd-Frank Act, the pace of rule-writing by the U.S. Securities and Exchange Commission has slowed by about half.
The agency’s five commissioners haven’t met once in the last four months to approve or propose regulations required under Dodd-Frank, designed to curb the kind of risky practices that fueled the 2008 financial crisis.
The most important factor cited both by Schapiro and agency observers, however, is legal. Last July, the U.S. Court of Appeals rejected an SEC rule that would have made it easier for shareholders to insert board candidates onto public-company ballots, saying the agency failed to adequately assess the costs.
Some of the SEC’s delayed rules strike at the roots of the 2008 crisis. One example is a rule that would ban firms from designing asset-backed securities deals that put their interests in conflict with investors. The SEC didn’t propose the rule until September, five months after the law said it should be adopted. The proposal’s comment period was extended twice; the commission has yet to schedule a final vote.