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May 11

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SEC Regulations Will Get New Economic Scrutiny

The Securities Exchange Commission (SEC) is paying much greater attention to economic cost-benefit analysis in its rule making activities. Private concerns wishing to alter the SEC’s rulemaking should consider using economic analysis and rationale in their comments to a greater extent than previously.

What the Republicans could not accomplish legislatively when Dodd-Frank was first being considered is now being partly accomplished through the regulatory rule-making process. Two government reports advocate that economic cost-benefit analysis be more explicitly and extensively considered when implementing Dodd-Frank.

These reports came from the Government Accountability Office (GAO), entitled “Dodd-Frank Act Regulations Implementation Could Benefit from Additional Analyses and Coordination” and the SEC Office of Inspector General, entitled “Follow-Up Review of Cost-Benefit Analyses in Selected SEC Dodd-Frank Act Rulemakings”. We provide quotes from these reports, and responses from the SEC Chairperson in this article.

Businesses should welcome the opportunity to become more involved in this process.

 

About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2012/05/sec-regulations-will-get-new-economic-scrutiny/

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