Sunsets, Russets, and Rule Resets

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2019-05-23

Posted by Hester M. Peirce, U.S. Securities and Exchange Commission, on Thursday, May 23, 2019
Editor's Note: Hester M. Peirce is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on her recent remarks at the CARE Conference, available here. The views expressed in this post are those of Ms. Peirce and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Thank you, Peter [Easton] for that kind introduction. I appreciate the chance to be with you at today’s conference to discuss Hot Topics at the Securities and Exchange Commission. It is a small population of people who would describe anything the SEC does as hot, but I suspect there are more than a few in this room who might be a part of that unusual crowd. Given that we share an interest in these issues, I hope that we can keep the conversation as interactive as possible, but I will start with a few observations about SEC rulemaking and the SEC’s agenda. Before I begin, I must give the standard disclaimer that the views that I represent are my own and do not necessarily represent those of the Securities and Exchange Commission or my fellow Commissioners.

I talk frequently about my home state of Ohio. In the ensuing conversations, I have learned that people from the coasts do not know a lot about the middle of the country. “Ohio? That’s the state that grows all the potatoes, right?” My response usually goes something like: “No, actually, that’s Idaho, which is about 1600 miles away from my beloved Buckeye state.” Were someone to make that mistake today, I might respond with a bit more enthusiasm: “Actually, you are thinking of Idaho, which does have lots of potatoes, but doesn’t have any regulations.” That would be a slight exaggeration. Last month, Idaho’s legislature did not reauthorize the rules on the state books, which meant, absent emergency action to retain them, they would all expire in July. [1] Idaho’s rules sunset every year unless they are reauthorized. Usually they are. This year, they were not. Most rules likely will remain on the books through a temporary workaround, but the governor announced that he would “use the unique opportunity to allow some chapters of Idaho Administrative Code that are clearly outdated and irrelevant to expire on July 1, 2019.” [2]