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The SEC is Reviewing and Seeking Comment on the Affects of Certain Rules on Small Businesses (Including Reg FD and the Insider Trading Rules)

The Regulatory Flexibility Act of 1980 requires that federal agencies review those rules that “have a significant economic impact upon a substantial number of small entities … to determine whether [they] should be continued without change, or should be amended or rescinded … [in order] to minimize any significant economic impact … [on] such small entities.” Reviews must be undertaken within ten years of the publication of a final rule, and must take into account the:

  • continued need for the rule;
  • nature of complaints or comments received concerning the rule from the public;
  • complexity of the rule;
  • extent to which the rule overlaps, duplicates or conflicts with other federal rules, and, to the extent feasible, with state and local governmental rules; and
  • length of time since the rule has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule.

Yesterday the Securities and Exchange Commission published a list of 17 rules that will be reviewed over the next 12 months. The list includes, among others, those rules related to:

  • selective disclosure (Regulation FD);
  • insider trading (Rules 10b5-1 and 10b5-2)
  • the delivery of proxy and information statements to households; and
  • auditor independence requirements.

The Commission is soliciting public comment, with a particular interest on whether the rules affect small businesses in new or different ways than when they were first adopted.

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