May 12, 2022 - This week, the Securities and Exchange Commission (SEC) announced that it would extend the comment periods for three recent proposed rulemakings, including two proposals with which the LSTA is engaged.  The LSTA actively advocated for an extension of the Private Funds Rule comment period as well as a more general return to “normal order”.  As reported by LCD, we are gratified that the SEC responded favorably to our specific extension request and, more importantly, we are hopeful that the extension reflects an exit by the SEC from the “Regulation Raceway” and a general return to normal order, especially for complex rulemakings. As SEC Chair Gary Gensler noted in the SEC’s press release, the SEC “benefits greatly from hearing from the public on proposed regulatory changes. Commenters with diverse views have noted that they would benefit from additional time to review these three proposals, and I’m pleased that the public will have additional time to provide thoughtful feedback.”  We couldn’t agree more.

Shortly after the Private Funds Rule was approved the LSTA submitted a letter joined by 12 other trade associations asking the SEC to extend the comment period for the private funds rule.  Soon thereafter, SIFMA, joined by 24 trade associations (including the LSTA) submitted a second letter to the SEC, highlighting the SEC’s historically broad agenda (which includes 54 separate rulemakings) and noted that stakeholders will have to review over 3,500 pages of proposed rules and answer roughly 2,260 questions for only 15 of those rulemakings.  The letter explained that the SEC’s “30-day” approach to comment periods diverges from Commission practices under other recent Commissioners and concluded by pointing out that needlessly short comment periods harm investors and markets.  Most recently, 47 Members of Congress, including 28 Democrats, sent a powerful message to Chair Gary Gensler to, as the WSJ put it, “tap the brakes” and provide more time for stakeholders to “provide effective and meaningful input.”  The LSTA partnered with several trade associations to bring these process concerns to the attention of many of the members who signed the letter.

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