Regulatory Priorities and COVID-19

Together we are all confronting unprecedented challenges posed by COVID-19. I want to express my sincere gratitude to Chairman Clayton, my fellow Commissioners, and, most of all, the staff of the SEC for rising to meet these challenges.[1] While adjusting to altered work and personal routines, not to mention the uncertainty and anxiety we all face, the staff—with great leadership in each office and division—has nevertheless ensured that we are moving quickly and carefully to address rapidly evolving economic and social circumstances. In the near term, we should continue to focus our regulatory efforts principally on the most urgent issues facing the markets and the public as a result of this health crisis.

Accordingly, I want to highlight two considerations that should inform the regulatory approach of the SEC in the current climate. First, we should move quickly and clearly to extend current and recently closed comment periods to ensure that the public has an adequate opportunity to provide full and complete comments on the Commission’s proposed regulatory actions.

Second, we should proceed with great caution in considering whether to take regulatory action outside of that called for by the current dire and pressing public health crisis and its ramifications for the public, investors, markets, and the economy.[2] A careful balancing of interests, including the burdens we all face in coping with the economic and social challenges of protecting ourselves, our families, and our nation, suggests that regulatory action in the near term not related to the exigencies created by COVID-19 would rarely be warranted.

Comment Periods

We should take action now to extend all comment periods by at least 60 days starting with those that closed in mid-March, just as this crisis was beginning to take its toll in the U.S., and continuing through all currently open periods.[3] With respect to those comment periods that have not yet closed, it is important to take action now and not wait until the deadlines loom close or pass. This will ensure that the public can plan around the disruption of professional routines, diversion of resources to crisis management, and added childcare and other caretaking responsibilities.[4]

In addition, we should state with certainty how much additional time the public has to submit comments. The current statement on comment periods provides a date for earliest agency action on the affected rule proposals. The public, however, has no way of knowing how much in advance of that date they must plan to submit comments. By contrast, the multi-agency statement on the Volcker covered funds comment period stated unambiguously that the agencies will consider comments submitted before May 1, 2020.[5] We should provide similar clarity, retroactively and going forward, in our actions and statements regarding the SEC’s comment periods.

Commission Actions

In recent weeks, as the Chairman highlighted in his statement, the Commission has taken action on numerous fronts to address the emerging risks and challenges posed by COVID-19. Those risks and challenges continue to evolve and it is crucial that the Commission continue to devote its resources to the most pressing issues faced by investors, market participants, and capital markets more broadly.

The Commission should carefully analyze each action it takes in light of the altered economic and social landscape. Relevant considerations in that analysis include whether an action is directly responsive to COVID-19; whether an action represents an appropriate use of agency resources at a time when we are routinely called upon to take emergency actions; whether an action will unduly tax the already strained resources of investors, market participants, or the public; whether we can adequately assess the economic effect of an action in light of rapidly evolving economic conditions; and whether an action is otherwise critical to advancing the agency’s mission.[6] None of these factors dictates a specific outcome, but rather each should be weighed carefully and balanced against the anticipated benefits of any action.  

I am confident that we will continue to proceed thoughtfully, effectively, and in a manner that demonstrates the deep commitment of this agency to its mission.