FR 2021-02861

The document in question is a notice from the Securities and Exchange Commission (SEC) asking for public comments on the extension of information collection requirements under the Credit Risk Retention rule, known as Regulation RR. This rule is tied to both the Securities Exchange Act and the Sarbanes-Oxley Act, specifically addressing recordkeeping and disclosure requirements.

General Summary

The SEC intends to extend the collection of information related to Regulation RR, a rule affecting companies' financial disclosures. Approximately 1,647 issuers are currently complying with this rule, and each response requires about 14.389 hours to complete. The agency is calling for feedback within 60 days from the notice's publication date, specifically regarding the necessity, accuracy, and potential areas for improvement in this data collection process.

Significant Issues and Concerns

One concern with the document is its technical language. It references complex legislation and regulations, such as the Sarbanes-Oxley Act and Section 15G, which could be difficult to understand for individuals without a legal or financial background. This could limit the wider public’s ability to engage with and comment on the proposed information collection.

Additionally, the document outlines a detailed calculation of the paperwork burden on companies. While quantitative, these calculations may not be easily comprehensible to those unfamiliar with regulatory compliance frameworks. The document also does not provide an explanation of why the current data collection is deemed sufficient or necessary, nor does it offer past performance metrics to support the extension request, which could help justify the need for continued regulation.

Public Impact

The document’s call for public comment could impact the broader public by ensuring that the SEC’s recordkeeping requirements align with current market conditions and stakeholder needs. Public input could potentially lead to more efficient or relevant data collection practices, ideally benefiting investors and issuers alike by maintaining transparency and reducing unnecessary administrative burdens.

Impact on Stakeholders

For companies that fall under this regulation, the proposal primarily means a continuation of current reporting requirements, which could be perceived either positively or negatively, depending on the administrative burden they feel this imposes. From a positive perspective, maintaining existing reporting requirements helps ensure stable regulatory expectations. However, companies may find the time and resources needed to comply with these extensive reporting requirements burdensome, especially if their processes aren’t streamlined or automated.

Investors might benefit from continued transparency if companies maintain high disclosure standards. However, the general lack of clarity in the document's justification for this extension could lead to questions about its overall necessity, potentially impacting the perceived credibility of these regulations.

In summary, while the SEC's solicitation for comments represents an opportunity for stakeholders to shape the future of financial regulations, the complexity and lack of detailed explanations in the document could hinder effective public engagement.