On March 10, 2025, the SEC voted along party lines to amend SEC regulations in order to rescind the SEC’s delegation of authority to the Director of the Division of Enforcement to issue formal orders of investigation. The SEC delegated this authority to the Director of the Division of Enforcement in 2009 for a one-year period, and in 2010 the SEC extended this delegation of authority indefinitely. The delegation allowed the Director to issue formal orders of investigation without the SEC’s approval. Formal orders designate the staff of the Division of Enforcement authorized to issue subpoenas in connection with investigations under the federal securities laws. With the rescission of this delegation, the Division of Enforcement will need approval from the SEC in order to issue formal orders of investigation and issue subpoenas. The SEC stated that the recission “is the result of the Commission’s experience with its nonpublic investigations” and is “intended to increase effectiveness by more closely aligning the Commission’s use of its investigative resources with Commission priorities.”
The final rule rescinding the SEC’s delegation of authority was not preceded by notice of the proposed rulemaking and an opportunity for public comment because the SEC determined that the “amendment relates solely to agency organization, procedure, or practice.” The final rule became effective on March 14, 2025.
The SEC’s adopting release is available here.
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