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SEC Cost-Benefit Analysis Bill to be Considered by House

The House of Representatives is expected to vote soon on legislation that would impose additional requirements on the SEC’s cost-benefit analysis process.  The "SEC Regulatory Accountability Act" mandates that the SEC Office of the Chief Economist participate in any cost-benefit analysis and would require the SEC to review its existing regulations every 5 years to determine if they are outmoded, ineffective, insufficient or excessively burdensome.  Additionally, the bill requires the SEC to conduct a post-adoption assessment of any “major” regulation to measure the economic impact of the regulation and the extent to which it has accomplished its stated purpose.

The House Financial Services Committee passed the bill last week and House Majority Leader Eric Cantor has said that it will be considered by the full House later this month. According to the Congressional Budget Office, enactment of the bill is expected to cost $23 million over five years and require the hiring of 20 additional staff. 

The SEC has been under recent scrutiny for inadequate cost-benefit analysis.  Most recently, the SEC's proposed proxy access rule was struck down in 2011 for failing to adequately assess the economic effects of the rule.