A confluence of external factors may have suppressed regulatory activity over the past week – the budget, sequestration, gun control, immigration, tax filing deadline, or what have you. In any event, this morning’s review takes the opportunity to catch up on a few events and questions that might not otherwise garner attention:
- Environmental Protection Agency (EPA)’s response to a possibly record-setting docket;
- Office of Management and Budget (OMB)’s completion of review of a major Department of Energy (DOE) efficiency rule;
- Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) adoption of “red flag” rules;
- SEC’s foray into public disclosure by social media;
- A little more National Labor Relations Board (NLRB) recess appointments discord; and
- The “beginning of the end” of Term watch at the United States Supreme Court (SCOTUS).
Carbon Delay: The EPA reportedly conceded that it would delay finalization of its proposed Greenhouse Gas New Source Performance Standard for Electric Generating Units until 2014. EPA received thousands of substantive comments and reportedly more than 2,000,000 total comments (many mass mailings) on the proposed rule.
►‘Mass mailings’ do not add substance to EPA’s consideration of the final rule, but managing those mass mailings may simply slow the process of consideration and the process of formulating a final rule. In this case, the depth and complexity of the issues probably drive the delay.
Electric Distribution Transformers: The highlight from OMB last week was the completed review, consistent with change, of the Department of Energy (DOE) Energy Efficiency Standards for Distribution Transformers final rule. The subject of the rule (hidden beneath the lingua franca of public utilities engineering) are power grid transformers, so the costs and benefits should spread across the grid. This economically significant final rule would implement a combination of a judicial settlement, some negotiated rulemaking, and a recurring reevaluation.
Red Flags: On April 10, 2013, the SEC and CFTC jointly adopted Identity Theft Red Flag Rules that require broker-dealers, mutual funds, investment advisers and certain other regulated entities to adopt programs designed to detect “red flags” and prevent identity theft. The rules require financial institutions and creditors to develop and implement a written identity theft prevention program designed to detect, prevent, and mitigate identity theft in connection with certain existing accounts or the opening of new accounts, and include guidelines to assist in the formulation and maintenance of programs that would satisfy the requirements of the rules.
Catching up on Digital Discourse: The SEC, two weeks ago, released the results of an investigation that permits public companies to make at least some corporate disclosures via social media channels in an April 10, 2013, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: Netflix, Inc., and Reed Hastings: Regulation FD. The report suggests that use of social media for public company disclosure is that investors must generally be aware – i.e. the company needs to disclose to them – that the company is using the social media channel to disclose information.
►While the report comes to the issue from the perspective of investigating a company’s actions (Netflix President’s Facebook page), a real question remains: has the SEC established a standard that stratifies investors by their adherence to a commercial third-party’s business model (i.e. advertising), and, therefore, should the SEC being adopting a rule? Business interests may do so in their interest, but agencies must be cautious about their love affairs with social media and the implications for “public” notice.
At Odds: President Obama (POTUS) proposed an increase in his FY2014 budget for the NLRB and announced three NLRB nominations; the House passed legislation that would bar all NLRB action until its post-Noel Canning authority is resolved. It would appear that they are not talking.
City of Arlington Watch: While many watch eagerly for politically freighted decisions (which might be decided on constitutional grounds large or small) from the United States Supreme Court (SCOTUS), this blog takes a more precise approach: The Court heard argument in City of Arlington v. FCC on January 16, 2013, so a decision may now be ripe on whether a court should apply Chevron v. NRDC deference in reviewing an agency’s determination of its own jurisdiction. An opinion may come as early as tomorrow, or Wednesday, … or late June.
Happy April 15th – do you know where your taxes are? (which explains the picture at the top of this post).