Some of the U.S. Securities and Exchange Commission's Dodd-Frank rules may face legal challenges after a federal appeals court ruling rejected an agency regulation on shareholder rights, analysts said.
The SEC rule written last year was meant to open company boards to candidates pushed by major shareholders. The U.S. Court of Appeals in Washington yesterday agreed with business groups that the rule shouldn't be implemented because the regulator didn't properly explore the costs of the change.
The requirement that the SEC do a full cost-benefit analysis on its rulemaking has been a trouble spot for the agency, which has lost several similar cases in the same court. Today's defeat comes as the SEC works on more than 100 rules it was assigned by the Dodd-Frank overhaul enacted a year ago.
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