President Trump signs executive order restricting new regulations

President Donald Trump on Jan. 30, 2017, signed an executive order requiring any executive agency seeking to issue a new rule to target two existing ones for elimination.

It was not immediately clear whether the order directly affects independent agencies such as the SEC. The directive applies to “an executive department or agency,” but does not define those terms. An SEC spokesman did not reply to a request for comment.

Under Trump’s order, a regulator, when proposing a new rule, must at the same time “identify at least two existing regulations to be repealed.” The order also directs agency heads to hold the total cost of all new regulations to zero for the current fiscal year, and to offset cost increases from new regulations by cutting existing rules.

“This will be the biggest such act that our country has ever seen,” Trump told reporters prior to signing the executive order. “There will be regulation; there will be control. But it will be a normalized control where you can open your business and expand your business very easily, and that’s what our country has been all about.”

Trump went on to call the Dodd-Frank Act a “disaster” and promised to “do a big number” on the 2010 Wall Street reform law, echoing recent Republican calls to dismantle Dodd-Frank by Vice President Mike Pence and House Financial Services Committee Chairman Jeb Hensarling. PL111-203

The action builds on a Jan. 20 “regulatory freeze” memo the Trump White House issued to agency heads, ordering them to postpone the implementation of regulations that haven’t yet gone into effect.

The executive order’s effect on the SEC is “hard to say,” wrote Jay Brown, a professor at the University of Denver’s Sturm College of Law, in an email.

The Clinton-era Executive Order 12866 mandates that “significant” regulatory actions be reviewed by the Office of Information and Regulatory Affairs within the Office of Management and Budget (OMB). E.O. 12866 also requires the publication of a Unified Regulatory Agenda.

Trump’s order stipulates that no new rule will be issued unless it is approved by the OMB director and included in the unified agenda.

Brown points out that independent agencies, “while required to include rules in the URA, aren’t required to submit rules to OMB under Executive Order 12866,” which suggests that independent agencies might not be bound by Trump’s order.

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