SEC Announces Amendments To Rules For Administrative Proceedings

The Commission announced the adoption of amendments to its Rules of Practice which govern administrative proceedings. Previously, the SEC had issued proposed amendments which had been the subject of a number of comments.

The amended rules, according to the release, will impact four key areas:

OIP: Under amended Rule 360 the Order will designate the time for preparing an Initial Decision as 30, 75 or 120 days from the completion of post hearing briefing or dispositive motions. The maximum length of the prehearing period will be lengthened from its current four months to: 1) Ten months for those designated as 120 days; 2) Six months for 75 day actions; and 3) 4 months for 30 day actions.

Depositions: Under amended Rule 233 in 120 day proceedings each party may notice three depositions if there is a singe Respondent. In actions with multiple Respondents up to five depositions can be noticed per side. Each side can request an additional two depositions under expedited procedures.

Answer: Amended Rule 856 provides for three types of dispositive motions at various stages of the proceeding. The standards and procedures are specified in the rule.

Evidence: Amended Rule 320 provides for the exclusion of irrelevant, immaterial, unduly repetitions and unreliable evidence. Hearsay may be admitted if it is relevant, material and reliable.

Finally, the amendments provide for service in foreign jurisdictions, the disclosure of experts and their reports and procedures for an appeal to the Commission. The amendments will become effective 60 days after publication in the federal register. They will apply to all proceedings commenced on or after the effective date and to the stage of pending proceedings. The SEC has not yet released the text of the amendments.