ICR D.C. Insider: July 2022


In the July 2022 edition of The ICR D.C. Insider, we share our insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.

The Supreme Court & Taming Regulatory Overreach

Cross Industry Regulatory Limitations Could Be On The Way – The Supreme Court’s recent 6-3 decision to curb the Environmental Protection Agency’s (EPA) powers could provide legal ammunition for challenges to a broad range of rules from regulatory agencies. The decision could have a sweeping impact on the ability of any federal agency oversight, by potentially removing the power Congress has delegated to federal agencies to oversee and regulate their areas of expertise. For example, the SEC’s ability to conduct rulemaking or issue fines to companies that violate its policies. By expanding the “Major Questions” principle, the Court has created a road map for lower courts to strike down other regulations in the years to come.


Spring 2022 Regulatory Agenda – The Office of Information and Regulatory Affairs announced the Spring 2022 Unified Agenda of Regulatory and Deregulatory Actions. The SEC’s section of the report lists 53 short- and long-term regulatory actions that are either in the final rule stage or have been formally proposed by the Commission.

 A Full Five-Member Commission – With the Senate’s vote confirming Jaime Lizarraga (D) and Mark Uyeda (R), the SEC now has its full five members. Nevertheless, Chair Gary Gensler will have the three-vote majority he needs to advance his ambitious slate of proposals.

Continued Commentary On Climate Disclosure Rules – Companies are asking the SEC to tweak its proposed climate-disclosure rule to give dealmakers enough time to report information about acquired companies. Among the companies writing to the SEC are online marketplace Etsy Inc., apparel retailer Gap Inc., ride-hailing company Uber Technologies Inc., and business-software provider Salesforce Inc.  All of these companies noted concerns about the proposed rule, including increased costs and a lack of clarity around the threshold for certain disclosures.

Are Financial Information Providers Investment Advisers? – The SEC has requested information on the activities of financial information providers amid growing concerns over their influence on investment decisions. Critics have expressed concerns that information providers, particularly index companies such as S&P Global, MSCI, and FTSE Russell, which assist in trillions of dollars of investment decisions globally, have acted as unregulated investment advisors.

Proxy Voting Advice – The SEC voted 3-2 to rescind rules introduced under former President Trump which critics said impeded the independence of firms that advise investors on how to vote in corporate elections. The decision rescinds two exemptions: one which required proxy advisers to provide a first look to corporations of the advice to be placed on the agenda; another allowed clients of proxy firms to be notified of any written responses to their advice from companies. The rescission becomes effective 60 days after it’s published in the Federal Register.

Key Developments

Window Narrows for Congressional Actions – As Congress returns from its Fourth of July recess, there are currently three work weeks planned before the Senate and House leave for the rest of summer before the fall campaign season accelerates. A number of priorities remain unresolved. At the forefront, is the current deadlock in the effort to pass the bipartisan U.S. Innovation and Competition Act. The USICA would provide $52 billion to subsidize domestic semiconductor manufacturers. Senate Minority Leader Mitch McConnell (R-KY) pledges that Republicans will walk away from this bipartisan legislation if Democrats pursue Reconciliation legislation that would include a range of other policy priorities. The Reconciliation bill under consideration includes a proposal to raise taxes on the beneficiaries of pass-through businesses which earn more than $400,000 a year or $500,000 for a couple (a 3.8% surcharge), among a number of other measures.

Strengthening CybersecurityThe Cybersecurity and Infrastructure Security Agency (CISA) published the second version of “Cloud Security Technical Reference Architecture (TRA)” which strengthens guidance to fulfill a key mandate under President Biden’s Executive Order (EO) 14028 – “Improving the Nation’s Cybersecurity.” The Cloud Services TRA is designed to guide agencies’ secure migration to the cloud by defining and clarifying considerations for shared services, cloud migration, and cloud security posture management. While the TRA was developed for federal agencies, it advises all organizations using or migrating to cloud environments to review the TRA document and adopt its practices as applicable to most effectively manage organizational risk.


Efforts To Regulate Crypto Continue – Various developments and approaches include:

  • Federal Reserve Vice Chairwoman Lael Brainard is advocating for better guardrails for cryptocurrencies in order to protect small investors and to dampen any risks that might emerge as the industry grows. Speaking at a Bank of England conference in London, she also called for steps to address crypto trading and lending firms that engage in activities similar to those in traditional finance “without comparable regulatory compliance.”
  • The Treasury Department delivered “a framework” to President Biden for international engagement and an inter-agency approach to address the risks and benefits of digital assets. It directs the Administration to promote development of digital asset and central bank digital currencies (CBDC) technologies.
  • SEC Chair Gensler proposed “one rule book” for the regulation of crypto. The agency is looking to strike agreements with other financial regulators, including the Commodity Futures Trading Commission (CFTC), to avoid gaps in the oversight of the crypto sector. This is a marked change in tone and focus for Gensler, who has been aggressive in promoting the SEC as the primary crypto regulator.