ICI Supports Proposed Changes to SRO's Procedures for Filing Rule Changes

Washington, DC, June 4, 2004 - The Institute supports the SEC's recent efforts to modernize the Self-Regulatory Organization (SRO) rulemaking process, but, in a recent comment letter, reiterated its recommendation that interested persons be given more time to comment on significant SRO proposals.

Background
The SEC has proposed changes under the Securities Act of 1933 and the Securities Exchange Act of 1934 that would make the rule filing process more efficient and transparent and reduce costs for the SROs and the public. First, the SEC would require SROs to file their proposed rule changes electronically, rather than in paper format. Second, SROs would be required to promptly post on their websites a copy of all proposed rule changes filed with the SEC.

ICI Position
The Institute supports many of the proposed rule's provisions, including requiring each SRO to:

post all proposed rule changes, and any amendments, on its public website no later than the next business day after filing with the SEC;
post and maintain a current and complete version of its rules on its website; and
update its public website to reflect rule changes no later than the next business day following notification of the SEC's approval of the rule change.

The Institute states that the proposed requirements would enhance access by interested persons to SRO rules and rule changes, thereby facilitating efforts to identify and comment on SRO proposals. The Institute's letter also states that the proposal would facilitate compliance efforts.

However, the Institute expresses extreme concern that the SEC has not addressed the short time period provided for public comment on SRO proposals. According to the Institute, a 21-day comment period often does not provide a meaningful "opportunity" to comment because it is extremely difficult to develop comprehensive, well-considered comments in this period, especially with respect to complex proposals. The Institute urges the SEC to extend the public comment period to 60 days for significant SRO proposals.