SEC Commissioner Hester Peirce called on the Commission to develop a culture for the periodic elimination of outdated rules.

In remarks at the CARE Conference on rules, rulemakings and regulating in a global market, Ms. Peirce reported that the SEC has begun the process of updating certain rules, including those under Sarbanes-Oxley Act Section 404(b). Ms. Peirce said that the SEC should encourage staff to notify SEC rulemaking divisions regarding rules that should be updated (e.g., enforcement attorneys have knowledge about how the agency's transfer agent rules need to be improved to protect investors from fraud). Ms. Peirce emphasized the need to reward staff whose insights play a critical role in its rulemaking priorities.

Referring to the SEC's recent cross-border proposal on security-based swaps, Ms. Peirce stated that the SEC has had to determine where its rules "should end and those of our regulatory counterparts overseas should begin." Ms. Peirce observed that early action in an area by one jurisdiction can help other jurisdictions think about how they could address the same area. She said that the SEC could learn from foreign counterparts in areas like crypto regulation offerings, for example, noting Bermuda's experience with digital asset regulation and citing to the Bermuda Monetary Authority's recently published draft guidance for crypto custodial services.

Commentary / Steven Lofchie

As to Commissioner Peirce's suggestion that there are a number of SEC rules with which we might dispense, perhaps we can come up with a list (email any suggestions). For starters, how about SEA Rule 8c-1 and SEA Rule 15c2-1 (both of which have been superseded by SEA Rule 15c3-3), SEA Rule 15c2-5 (there is no such thing as a "special insurance premium funding account") and SEA Rule 31T (Temporary Rule Regarding Fiscal Year 2004)?

Also I am happy to take suggestions as to statutory provisions that don't make sense. The Dodd-Frank provisions for the regulation of "major swap participants" (of which there are none and never will be) should be good to go.

See Marie Kondo, "The Life-Changing Magic to Tidying Up." Then, as to each rule you review, ask yourself, does this rule "spark joy?"

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