Proposals for the SEC’s future rulemaking strategy were outlined by Acting Chair Mark Uyeda when he delivered a speech to the Investment Company Institutes 2025 Investment Management Conference.

Uyeda criticized the SEC’s tendency over the past four years to pursue rulemaking shortcuts. He said the SEC’s rulemaking activity should be more analogous to a freighter than a speedboat, and urged caution and measure.

And he outlined several areas for improvement, including increasing the time window for rule proposal comment, and expanding lines of industry engagement,

Public engagement

Uyeda noted that in recent years, the SEC issued proposed rulemakings with a more constrained time frame for comment than the 60-day standard endorsed by the Administrative Conference of the United States. This deviated from previous practice, which offered 60- or even 90-day comment periods.

He endorsed returning to the 60-day standard, as well as re-proposing rules or re-opening the comment file, if the circumstances show that more input is required.

He also welcomed increased interactions with shareholders to determine whether new rules are necessary, and if so, how they can be cost-efficient and effective. His suggestions for interactions included public roundtables, requests for information, concept releases, and advance notice of proposed rulemaking.

Uyeda also noted the necessity of reducing funds’ summary prospectuses to 3-4 pages from the standard 12-15 pages of today, and of researching ways to reduce compliance costs for small firms.

Rule proposals

With rulemaking prudence, efficacy, and cost efficiency in mind, Uyeda endorsed either withdrawing or re-proposing proposed rules that go beyond the SEC’s mandate, with a focus on rules related to the safeguarding of advisory client assets.

He hinted that the best course of action could be the rule’s withdrawal, citing significant concern expressed by commenters over its wide scope, including the extension of custodial requirements to crypto assets.

He also floated the idea of an enforcement pause, delayed compliance dates or re-proposals for recently adopted rules, including the recently amended Form N-PORT reporting requirements.

Enforcement alternatives

Uyeda stated that the SEC couldn’t rely on enforcement alone as a compliance tool, using the Accounting and Disclosure Information (ADI) publication as an example of how the SEC could effectively review required disclosures.

He also highlighted the exemption application process as an avenue to explore the viability of innovative investment products without the use of rulemaking.

Finally, Uyeda highlighted the widespread adoption of ETFs as an example of a product that emerged through the exemption process, adding that exemptions could be leveraged to create products that assist retirees in managing their finances.