As practices, technologies, and products change, the
SEC
adjusts its rules and issues new ones to keep market regulation timely and relevant.
A large part of the SEC’s job is to interpret the securities laws passed by Congress, recasting them into practical, specific rules for companies and individuals to follow. The SEC also reviews any proposed rules set by
self-regulatory organizations (SROs)
and has final say over whether those rules are acceptable as submitted or need changes.
The process
Rulemaking usually begins with a rule proposal, which lays out specific objectives and remedies. Sometimes the commission presents the public with a general description of the issue, known as a concept release, first. Then the commission can get feedback from the industry and from the public before drafting a proposal.
Once the commission approves a proposal, the public has time to comment on it, usually 30 to 60 days. Industry professionals generally weigh in, but ordinary investors can and do submit suggestions and opinions. The SEC staff then revises the proposal after reviewing comments and presents the new proposal to the commission.
