Update: The data in Figure 1 was updated in August 2023. Although the total number of proposals included in the figure increased, the trend stayed the same.

Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), has set an ambitious agenda for the agency. Whatever one thinks about that agenda, it’s a lot to get done, even for a hard-charging, get-things-done guy like Gensler. Rulemaking is not a quick process, but Gensler seems to have found a way to shepherd his agenda through a bit faster: decreasing the time allotted for the public to comment on proposed rules. But failing to provide adequate time for public comment can diminish the voices of investors and market participants in the rule-making process. More so, it may hamstring the SEC in identifying the consequences of the proposed rules.

The extent of the short-comment-period trend came to light when Senator Patrick Toomey (R‑PA) and Representative Patrick McHenry (R‑NC) pointed out that the SEC proposals under Gensler’s leadership have given the public less than 60 days to comment. This trend is a break from the norm, where executive orders, including under the Obama Administration, have recognized that 60 days is typically considered the minimum time frame for comments to be submitted. Where multiple rulemakings are pending, or the comment period includes holidays, agencies may consider longer timeframes for public comment.

But under Gensler, the SEC has consistently provided public comment periods that are shorter than the standard 60 days: two proposals had 60-day periods, five proposals had 45-day periods, and eight proposals had 30-day periods. Worse yet, most of the comment periods under Gensler have also overlapped with major holidays.

When compared to his predecessors, it is clear that Gensler is carving a new path for the SEC (see Figure 1). The vast majority of comment periods under former SEC Chairs Jay Clayton and Mary Jo White were 60 days or more. In fact, there have been more 30 and 45-day comment periods under Gensler in the last year than there were during the seven years the SEC was led by Clayton and White.

This trend continues with the latest four rule proposals from the SEC. The clock has not yet started running for these because they have not yet been published in the Federal Register, but three require the public to respond in 45 days with only the fourth allowing for 60 days. To put the task into perspective, the four proposals combined amount to 787 pages of reading and over 281 separate questions for which the SEC seeks comment.

Letters from the public keep unelected regulators accountable to the world outside their doors. Even if a comment letter does not ultimately change the direction of pending legislation, it serves as a record of review that can be important for debates in the future. More so, welcoming the public to share their expertise can help to limit the likelihood of unintended consequences. As SEC Commissioner Hester Peirce said in December, “The more eyes allowed to peruse a rule carefully, the more likely we are to identify potential bad consequences ahead of time.” Considering how deeply interconnected the U.S. financial system is, avoiding unintended consequences should be of paramount importance.

Without adequate time to consider the proposals, however, the public is effectively shut out of the process. Nick Losurdo, a partner at Goodwin Procter, told Investment News, “It makes it difficult, if not impossible, to give robust feedback on each of those proposals in their own right. Oftentimes, it’s the smaller firm and the softer voice that is not heard.”

The importance of listening to the softer voices is only made more significant by the fact that Gensler has built his agenda on giving investors what he claims they want. To hear the voices of investors and market participants, Gensler should make short comment periods the exception, not the rule. An ambitious agenda should not outweigh the importance of having the public represented.