The U.S. Chamber of Commerce’s (the Chamber) Center for Capital Markets Competitiveness appreciates the Commission taking the time to meet with us on September 1, 2022, to obtain additional information and comments about its proposed Share Repurchase Disclosure Modernization Rule (Proposed Rule). As discussed at our meeting, we are submitting this supplemental letter to memorialize and expand on two comments we provided verbally.
First, the Commission must redo its cost-benefit analysis of the Proposed Rule in light of the Inflation Reduction Act’s new excise tax on buybacks.
“The APA’s arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained.” FCC v. Prometheus Radio Project, 141 S. Ct. 1150, 1158 (2021). As part of that reasoned-decisionmaking requirement, an agency must take stock of a meaningful intervening event that occurs after a rule is proposed but before it is finalized—after all, if circumstances have changed, the assumptions and analyses that justified the rule in the first place may no longer hold. See, e.g., Portland Cement Ass’n v. EPA, 665 F.3d 177, 187 (D.C. Cir. 2011); see also API v. Johnson, 541 F. Supp. 2d 165, 185 (D.D.C. 2008) (finding arbitrary and capricious agency failure to consider intervening change in law). That commonsense requirement applies with particular force where, as here, an agency is charged by statute with “appris[ing] itself” of the “economic consequences of a proposed regulation before it decides whether to adopt the measure.” U.S. Chamber of Com. v. SEC, 412 F.3d 133, 144 (D.C. Cir. 2005).