Last December, President Obama signed into law the Fixing America’s Surface Transportation Act (aka the “FAST Act“). Buried in the FAST Act were several provisions intended to lighten the load of Securities and Exchange Commission compliance. Section 72001 requires the SEC to issue regulations to permit issuers to submit a summary page on Form 10–K (17 CFR 249.310), but only if each item on such summary page includes a cross-reference (by electronic link or otherwise) to the material contained in Form 10–K to which such item relates. Section 72002 requires the SEC to revise Regulation S-K to:
- further scale or eliminate requirements of regulation S–K, in order to reduce the burden on emerging growth companies, accelerated filers, smaller reporting companies, and other smaller issuers, while still providing all material information to investors; and
- eliminate provisions of regulation S–K, required for all issuers, that are duplicative, overlapping, outdated, or unnecessary.
Both these requirements come with a 180 day deadline, meaning that the SEC has until June 1, 2016 to complete these tasks. Presumably Congress intended that the SEC meet this deadline. Yet, 108 days have now passed without the SEC issuing any proposals. As of today, the SEC has only 72 days left. It is clear that the SEC does not afford statutory deadlines the same respect that it requires of private issuers with respect to SEC deadlines. It missed numerous deadlines imposed by the Dodd-Frank Act. Oxfam America actually had to sue the SEC twice over the SEC's failure to comply with Section 1504 of the Dodd-Frank Act. See Court Rules That The SEC Unlawfully Withheld Action Mandated By Congress.
Does it matter?
The SEC's failure to comply with statutory deadlines is far more serious than an issuer being late on a periodic report. The SEC has a superior, namely the law (c.f. Henry de Bracton ("Rex autem habet superiorem, Deum, scilicet, Item legem, per quam factus est rex."). The SEC must be seen to obey the law if it is to enforce the law.
"Nicht Bach, sondern Meer sollte er heißen." Alles Gute zum Geburtstag!