Aguilar says SEC© waiver process, especially denials, should be more transparent

Publisher: MarketWatch
Author: Francine McKenna

Luis Aguilar, a Democrat commissioner on the Securities and Exchange Commission whose term expired in June but whose successor has not yet been appointed, said in a statement on Thursday that the agency needs to enhance transparency and clarity for the waiver process.

Waiver requests are typically made when individuals or organizations are subject to SEC© oversight and risk automatic disqualification from continuing some business activities after a penalty of some sort. Aguilar revealed that although he and his fellow Commission members vote on some waiver requests—and those votes have been contentious with Aguilar and Kara Stein often denying the requests— the vast majority of requests are handled by the staff who deny them without ever notifying the commissioners.

Aguilar said he learned through a news article that, in the past two years, most SEC© waiver requests are not granted. He was surprised to learn that the number of times the Commission has not granted the “well-known seasoned issuer” waiver or a Regulation D Rule 506 (“Bad Actor”) waiver “has not been recorded consistently. ”In a March 12, 2015 speech, Chairwoman Mary Jo White said she had directed the staff to keep better track of waivers, including those that have not been granted. Aguilar recommends revising the waiver review process “so that both the Commission and the public have greater insight into the entire process”, particularly for waivers that are denied by the staff. His suggestions include the creation of a public website to track the progress and ultimate resolution of all waiver requests and inquiries.

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