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Regulators preparing for additional Dodd-Frank court challenges

Regulators are preparing for additional court challenges in regards to Dodd-Frank financial reform regulations following a recent federal appeals court ruling last month that the SEC failed to weight the costs and benefits of a rule making it easier for shareholders to nominate board directors.

"I was afraid of this all along," Commodity Futures Trading Commission commissioner Jill Sommers told Reuters. "The SEC had a rule that was challenged on grounds that I think there are concerns in our rules about, and I feel like we could equally have the same kind of challenges."

Other SEC and CFTC rules now in the potential crossfire include the failure to follow federal rule-making procedures, including not properly considering all public comments on a rule or failure to conduct a proper cost-benefit rules analysis, IWatchNews.org. The SEC's conflict minerals proposal that would require disclosure of the sources of certain ores and metals and the CFTC's speculative trading curbs are also at risk of litigation, as is a rule on derivatives databases initiated by a Dodd-Frank law.

A law that would require Wall Street banks to publicly disclose the potential costs and conflicts of interests involved in the sale of municipal bond sales under a plan by the Municipal Securities Rulemaking Board is also at stake, IWatchNews.org reports.

The Municipal Securities Rulemaking Board, which oversees banks working in tax-exempt debt markets, asked the SEC on Wednesday to approved the proposed municipal bond rule to allow for an increase in transparency on bond underwriters.

“With this rule regulators – for the first time – will have specific information on the market’s scale and risk,” CFTC Chairman Gary Gensler said in a prepared statement, according to IWatchNews.org.

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