SEC considers changes to Trump-era rules

The U.S. Securities and Exchange Commission said it would consider changes to regulations passed under the Trump administration, a move that drew criticism from its Republican commissioners.

Among the regulations the SEC plans to review are amendments to its whistleblower adjudication program and a rule that requires oil, gas and mining companies to disclose payments made to foreign governments. Both rules were approved late last year in opposition to the agency’s Democrats.

The decision to revise the rules is part of the SEC’s latest regulatory agenda, released on Friday. In addition to reviewing a series of Trump-era rules, the agency said it would write rules on environmental, social and governance-related investments, and on company disclosures about cybersecurity risks.

On Monday, the two Republican SEC commissioners criticized the agenda for reopening the rulemaking process on completed regulations and for failing to address other issues, such as clarifying the agency’s oversight of digital assets.

“Perhaps the absence of these rules is attributable to the regrettable decision to spend our scarce resources to undo a series of rules that the commission just adopted,” said Commissioners Hester Peirce and Elad Roisman.

Democratic commissioners Allison Herren Lee and Caroline Crenshaw voted against the whistleblower award and extractive industry rules last year, while then-President Jay Clayton voted in favor along with Peirce and Roisman. Gary Gensler took over as head of the SEC this year.

Ms. Lee, Crenshaw and Gensler did not immediately respond to requests for comment on the criticism of the SEC’s agenda.

Amendments to the SEC’s complaint adjudication program were first proposed in 2018. Changes that the SEC said would help streamline the adjudication complaints process received broad support. But advocates for the whistleblowers opposed several other amendments, including one that would allow the SEC to reduce the size of awards for information leading to fines of $ 100 million or more, simply because of their size. Attorneys for whistleblowers were concerned that the change could prevent highly paid Wall Street insiders from providing information.

Under the whistleblower program, whistleblowers who provide information leading to a successful enforcement action against a business are eligible for an award of between 10% and 30% of the overall monetary penalty.

The commission’s rule on payments to extractive industries, approved in December, also faced opposition during the rule-making process.

The rule was the SEC’s third attempt to implement a provision of the Dodd-Frank financial reform act of 2010 aimed at combating corporate corruption in resource extraction industries.

An early version of the rule was struck down by a district court in 2013 after a legal challenge by the American Petroleum Institute, a trade association. A second version was rescinded after Republicans won control of the United States Senate in 2017.

Disagreements over the latest version of the rule centered on the level of detail that public companies should provide when disclosing payments to foreign governments. The rule passed in December allows companies to disclose payments on an aggregate, country-by-country basis, rather than contract by contract.

Reopening the rulemaking process would waste resources on an issue that has already taken thousands of staff hours, Peirce and Roisman said Monday.

They also criticized the agency and Mr. Gensler for reconsidering rules that increased oversight of proxy voting advisers and made it difficult for small shareholders to present government and policy proposals at annual corporate meetings.

His criticism came when the SEC on Monday appointed a new director, Renee Jones, to its corporate finance division, which writes rules for companies that raise capital and disclose important news and events to shareholders.

Write to Dylan Tokar at [email protected]

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