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Do Public Comment Letters on Proposed SEC Regulations Matter?

Comment-Letters_cover.jpgThe U.S. Securities and Exchange Commission (SEC) encourages the public to comment on proposed rules during an open comment period. Various constituents, including companies, individual investors, associations, and audit firms, frequently provide comments on these proposed rules. Constituents may wonder whether or not their comments influence the final rules.
Financial Executives Research Foundation (FERF) interviewed subject matter experts who have participated in drafting rules, sent comment letters to the SEC, or have experience in reviewing SEC letters. Additionally, researchers at Case Western University examined comment letters received and used to finalize Crowdfunding (Release Nos. 33-9974) and Pay Ratio Disclosure (Release Nos. 33-9877) rules to determine if comment letters seem to influence the final rules issued by the SEC. The report also analyzes comment letters submitted by various stakeholders, such as individuals, companies, and associations, and their opinions (neutral, favorable, unfavorable) to determine whether the SEC considers certain types or sources of letters more seriously than others.