A recent Bloomberg article noted that SEC Chair Gary Gensler is taking longer than his predecessors to finalize the plethora of rules on his agenda. Out of the rules that have already been proposed, over two dozen are still in the queue to be adopted.
Moreover, the article points out that the “human capital management” proposal — which is on the Commission’s Reg Flex agenda for the latter part of this year — could be dead on arrival if it isn’t published for comment soon. Here’s an excerpt from the article that explains why:
A federal law, the Congressional Review Act, would let a Republican-controlled House and Senate in the next Congress quickly revoke regulations the SEC and other agencies issued in late 2024, if they avoid a presidential veto.
Gensler only has to finalize the climate rule within about a year to sidestep the Congressional Review Act, however. Other agenda items are more likely to encounter that challenge if they’re in the earlier stages of the rulemaking process.
One such agenda matter is a plan to require companies to report more details about their workforces. The SEC is looking to release a formal proposal by October. But the agency usually takes at least a year to turn a proposal into a rule, increasing the risk of a Republican Congress easily overturning it under the CRA.
During the “Dialogue with the Director” session on Friday at the ABA’s Business Law Section Fall Meeting, Jay Knight, Chair of the Federal Regulation of Securities Committee, asked Corp Fin Director Erik Gerding about the SEC’s forthcoming proposals. Erik didn’t comment on timing, but he did note that for all of the SEC’s rulemaking, the focus is on helping investors get the information they say they need in order to make investment and voting decisions.
It just so happens that investors will be weighing in on what they need when it comes to human capital at next week’s meeting of the SEC’s Investor Advisory Committee. The agenda allocates 20 minutes to discussing a recommendation on human capital management disclosure. I’m not in the forecasting business, but at the very least, this shows that the topic is still moving along — and has reached the stage of the IAC making an advisory recommendation. Stay tuned.
– Liz Dunshee, CompensationStandards.com, September 11, 2023
