Enter to open, tab to navigate, enter to select
New SEC Rule Amendments
Practical Law Legal Update w-003-1142 (Approx. 3 pages)
New SEC Rule Amendments
by Practical Law Litigation
| Law stated as of 16 Aug 2016 • USA (National/Federal) |
The Securities and Exchange Commission (SEC) recently announced amendments to its rules of practice, effective September 27, 2016, to bolster procedural and evidentiary safeguards in its administrative proceedings.
The Securities and Exchange Commission (SEC) recently announced amendments to its rules of practice to bolster procedural and evidentiary safeguards in its administrative proceedings.
Critics of the SEC's administrative proceedings have complained about the challenges that respondents face when the SEC prosecutes claims before its own judges in the agency's home court. The recent amendments, effective on September 27, 2016, address some of these concerns with updates the SEC hopes will provide parties with added clarity and flexibility. Among other things, the amendments:
- Expand the schedule to allow more time to both start the hearing and issue an initial decision:
- the SEC must issue its administrative decisions 30, 75, or 120 days from completion of the post-hearing or dispositive motion briefing or a finding of default; and
- for 120-day proceedings, the prehearing period may extend to a maximum of ten months from the date of service of the order instituting proceedings instead of the current four months.
(SEC Rule 360.) - Enable parties in 120-day proceedings the right to notice three depositions per side in single-respondent cases and five depositions per side in multi-respondent cases, and to request an additional two depositions (SEC Rule 233). The former rule only allowed a party to request permission to take the deposition of a witness who was likely to be unable to appear at the hearing.
- Clarify the types of dispositive motions that the parties may file at various stages of proceedings.
- Conform the rules to the Federal Rules of Civil Procedure or otherwise add more detail to SEC rules, including for rules relating to:
- the admissibility of certain types of evidence (SEC Rule 320);
- expert disclosures and reports (SEC Rule 220); and
- procedures for appeals (SEC Rule 401).
For more information on SEC administrative proceedings, see Practice Note, Navigating SEC Administrative Proceedings and Navigating SEC Administrative Proceedings Flowchart.