Senate Republicans want the SEC to explain why staff are leaving

Senate Republicans want the SEC to explain why staff are leaving

Senate Republicans want the SEC to explain why staff are leaving

Oct 30 (Reuters) – Senate Republicans want the SEC to explain why staff are leaving the nation’s corporate watchdog at the highest rate in 10 years amid a flurry of proposed rules, according to a letter seen by Reuters on Sunday.

The private letter dated Oct. 27 from Senate Republicans to Securities and Exchange Commission Chairman Gary Gensler adds to growing criticism that the U.S. regulator lacks domestic firepower which he needs to carry out his ambitious regulatory plans.

Gensler, a veteran Wall Street regulator who was handpicked by President Joe Biden, a Democrat, has already clashed with Republicans over proposals to watchdog over climate-related corporate disclosures.

Gensler has previously disputed that its new rules are critical to ensuring that US capital markets remain the global “gold standard”.

Republicans said he overstepped his authority and adopted a hostile stance toward the financial industry.

The SEC introduced 26 new proposed rules in 2022, more than double the number in 2021 and the highest total of any year in the past five years, the Republican letter says.

The letter, signed by six of the 12 Republicans on the Senate Banking Committee, refers to a public The report of October 13 published on the SEC’s website by the Office of Inspector General, the SEC’s internal watchdog, detailing staff attrition and reports of dissatisfaction.

Republicans want Gensler to explain how he will address the concerns in the report and also to allow more time for industry feedback on the new rules.

The SEC was not immediately available for comment.

Employees interviewed for the internal watchdog report said they received little feedback on the rules they had written, according to the report.

Staff feared an increased risk of litigation due to reduced industry comment periods, the report said.

The SEC is losing employees at its highest rate in 10 years, the inspector general’s report said. The agency expected attrition in senior officer positions to be 20.8% this fiscal year and 8.4% for attorney positions, he said.

The letter concludes that “efforts to ram through precipitated rules without proper analysis, deliberation or consideration of negative downstream impacts are nothing short of regulatory malpractice.”

Senate Republicans Thom Tillis of North Carolina, Mike Crapo of Idaho, Tim Scott of South Carolina, Michael Rounds of South Dakota, Bill Hagerty of Tennessee and Steve Daines of Montana signed the letter.

Report by Nell Mackenzie; Additional reporting by Huw Jones; Edited by Lisa Shumaker

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