The report card seeks to evaluate regulators and their respective progress on implementing Dodd-Frank rules, as well as reform issues that have not been addressed by the 2010 law.
Four categories are graded, including protecting the diversity of capital formation, reforming corporate governance, ensuring U.S. competitiveness through financial regulatory reform and preserving the integrity of accounting and auditing. Each category contains a number of subcategories that are also graded, as well as suggestions to improve the grade.
Out of the four categories, ensuring U.S. competitiveness through financial regulatory reform received a “C-,” the lowest grade in the report.
Under the category of ensuring U.S. competitiveness through financial regulatory reform, the Chamber of Commerce flagged two subcategories with the grade of I(D), which corresponds to the key explanation of an incomplete reform where the Chamber of Commerce has “strong concerns about [the] negative impact on the economy or specific industries.”
The subcategory of reforming the U.S. Securities and Exchange Commission was flagged for “fail[ing] to keep pace with rapidly changing markets.” The subcategory of systemic risk and financial stability oversight council was flagged because the Chamber of Commerce is “still concerned with how companies will be deemed systemically risky.”
The categories of preserving the integrity of accounting and auditing and reforming corporate governance were awarded the highest grades of “B-,” with two subcategories receiving an I(A), corresponding to reforms that are “complete (or near-complete)” and where the Chamber of Commerce is “satisfied with the regulation/outcome.”
Under preserving the integrity of accounting and auditing, the Chamber of Commerce highlighted the subcategory of FAS-5 for its inclusion of public comment on and delay of the loss contingency rule.
Under the category of reforming corporate governance, the subcategory of proxy access earned the maximum grade due to a D.C. Circuit Court ruling that voided a rule requiring corporations to include director nominees in proxy materials that are suggested by a long-term shareholder.
“The D.C. Court’s decision was a decisive blow to the SEC’s first attempt at rulemaking….reiterating the importance for regulators to demonstrate that the benefits of regulation outweigh the costs,” the Chamber of Commerce said.