Rule2026-10132
Rescission of Policy Regarding Denials in Settlements of Enforcement Actions
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 21, 2026
Effective
May 21, 2026
Issuing agencies
Securities and Exchange Commission
Abstract
The Securities and Exchange Commission ("Commission") is rescinding a rule of informal procedure that concerns settlements in judicial or administrative proceedings.
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 98 (Thursday, May 21, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 98 (Thursday, May 21, 2026)]
[Rules and Regulations]
[Pages 29892-29896]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10132]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 202
[Release Nos. 33-11417; 34-105504; IC-6965; IA-36158]
RIN 3235-AN77
Rescission of Policy Regarding Denials in Settlements of
Enforcement Actions
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Securities and Exchange Commission (``Commission'') is
rescinding a rule of informal procedure that concerns settlements in
judicial or administrative proceedings.
DATES: Effective May 21, 2026.
FOR FURTHER INFORMATION CONTACT: Samuel Waldon, Principal Deputy
Director, Division of Enforcement, (202) 551-6000, Securities and
Exchange Commission, 100 F Street NE, Washington, DC 20549.
SUPPLEMENTARY INFORMATION: Since 1972, the Commission has maintained a
policy, codified in Rule 202.5(e) of its rules of informal procedure,
17 CFR 202.5(e), that when it chooses to settle an enforcement action
in which a sanction is imposed, it will not settle unless the defendant
or respondent also agrees not to publicly deny the allegations in the
complaint or administrative order. For the reasons explained below, the
Commission now rescinds this policy and repeals Rule 202.5(e).
I. Background
When the Commission exercises its authority to investigate and
bring enforcement actions,\1\ it does not litigate every action to
judgment. Like all parties to litigation, the Commission and a litigant
against whom it brings a district court action or agency adjudication
may agree to settle.\2\ The Commission's decision to settle depends on
a range of factors, including the Commission's judgment that obtaining
an immediate result by consent better serves the public interest than
expending the resources and accepting
[[Page 29893]]
the risk that comes with fully litigating a matter.\3\ Similarly, a
defendant's decision to settle turns on numerous factors.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 77t(b), 78u(a), (d)(1), 80a-41(d), 80b-14(a).
\2\ We use the term ``settlement'' to refer to the resolution of
enforcement actions by consent in which the Commission and a party
against whom it has brought an action agree to terms to end that
action, including agreed-upon sanctions. Settlements can include
entry into consent judgments in district court and the acceptance of
settlement offers in an order issued in an administrative
adjudication.
\3\ SEC v. Citigroup Glob. Mkts., 752 F.3d 285, 295 (2d Cir.
2014) (``[The] factors that affect a litigant's decision whether to
compromise a case or litigate it to the end include the value of the
particular proposed compromise, the perceived likelihood of
obtaining a still better settlement, the prospects of coming out
better, or worse, after a full trial, and the resources that would
need to be expended in the attempt.'' (cleaned up)).
---------------------------------------------------------------------------
In a typical Commission settlement, a defendant in Federal district
court signs a consent that describes the terms on which the parties
have agreed to settle, or, in an administrative action, a respondent
signs an offer of settlement that contains those terms.\4\ These
documents reflect the defendant's (or respondent's) agreement and
representation that the defendant (or respondent) is entering into the
settlement knowingly and voluntarily. For actions in Federal district
court, the Commission (sometimes jointly with the defendant) will then
ask the court to enter a consent judgment that incorporates the terms
of the consent and to retain continuing jurisdiction.\5\ For
administrative adjudications, when the Commission accepts an offer of
settlement, the terms are incorporated into an order instituting
proceedings.
---------------------------------------------------------------------------
\4\ The consent is a contractual agreement, signed by the
parties, that reflects the terms of the settlement. It is a separate
document from a judgment entered by a court, and its terms are
usually repeated in the judgment or incorporated into that judgment
by reference.
\5\ Consent judgments are ``compromises in which the parties
give up something they might have won in litigation and waive their
rights to litigation.'' United States v. ITT Cont'l Baking Co., 420
U.S. 223, 235 (1975). They ``embod[y] an agreement of the parties
and thus in some respects [are] contractual in nature,'' but they
are also ``enforceable as * * * judicial decree[s].'' Texas v. New
Mexico, 144 S.Ct. 1756, 1764 (2024).
---------------------------------------------------------------------------
In 1972, the Commission adopted Rule 202.5(e), which sets out a
policy regarding settlements and is one of several ``informal and other
procedures'' that concern enforcement activities.\6\ The policy stated
the Commission's view at the time that in any civil lawsuit or in any
administrative proceeding of an accusatory nature, ``it is important to
avoid creating, or permitting to be created, an impression that a
decree is being entered or a sanction imposed, when the conduct alleged
did not, in fact occur.'' \7\ Accordingly, the Commission announced a
``policy not to permit a defendant or respondent to consent to a
judgment or order that imposes a sanction while denying the allegations
in the complaint'' or administrative order.\8\ By limiting the
circumstances under which the Commission will accept a settlement
offer, the policy binds the staff of the Commission's Division of
Enforcement (Enforcement) in settlement negotiations.
---------------------------------------------------------------------------
\6\ 37 FR 25224 (Nov. 29, 1972), codified at 17 CFR 202.5(e).
Congress bestowed upon the Commission ``the power to make such rules
and regulations as may be necessary or appropriate to implement the
provisions of this title for which [it is] responsible or for the
execution of the functions vested in them by this title.'' 15 U.S.C.
78w(a); accord 15 U.S.C. 77s, 80a-37, 80b-11; see also id. at 78u.
The Commission has exercised this authority to adopt formal rules of
procedure, 17 CFR 201.100 et seq., as well as informal procedures,
such as Rule 202.5(e).
\7\ Id.
\8\ Id.
---------------------------------------------------------------------------
The no-deny provisions that appear in settlements pursuant to this
policy are usually paired with a statement that a defendant is not
admitting the allegations (or liability). While the precise language
has varied over time, defendants and respondents typically agree that
they are entering into a consent without admitting or denying the
allegations. More specifically, defendants and respondents agree, among
other things, not to make `` `any public statement denying, directly or
indirectly, any allegation in the complaint or creating the impression
that the complaint is without factual basis.' '' \9\ The no-deny
provisions do not, however, apply to testimonial obligations by
defendants and respondents, and they do not affect their ability to
take legal or factual position in litigation and other legal
proceedings to which the Commission is not a party, including parallel
civil actions.
---------------------------------------------------------------------------
\9\ Powell v. SEC, 149 F.4th 1029, 1045 (9th Cir. 2025). The
usual language states that a defendant ``will not take any action or
make or permit to be made any public statement denying, directly or
indirectly, any allegations in the complaint or creating the
impression that the complaint is without factual basis'' and ``will
not make or permit to be made any public statement to the effect
that Defendants does not admit the allegations of the complaint, or
that th[e] Consent contains no admissions of the allegations,
without also stating that the Defendant does not deny the
allegations.'' SEC v. Novinger, No. 4:15-cv-358, Dkt 33-1, at ] 12
(N.D. Tex. June 3, 2016).
---------------------------------------------------------------------------
For the most part, the Commission does not require settling
defendants to make admissions.\10\ Together, these two components of
settlement language have been referred to as the ``no admit/no deny
policy.'' Thus, for over fifty years, when the Commission has settled
on a no-admit basis, it has only agreed to cede its ability to prove
its claims where the defendant has also agreed not to publicly deny the
allegations in the complaint. Settlement brings certainty and closure
without the risks and expenses of litigation, and often accelerates the
Commission's ability to collect and, if feasible, distribute collected
monetary sanctions to injured investors.
---------------------------------------------------------------------------
\10\ See infra n.26 (discussing admissions).
---------------------------------------------------------------------------
When the Commission agrees to settlements that contain no-deny
provisions, the Commission has only a limited judicial remedy in the
event a defendant breaches the settlement agreement by publicly denying
allegations. In the event of a public denial, the Commission's only
recourse, pursuant to the agreement, is to ask a court to vacate the
settlement, returning the case to active litigation and permitting the
Commission to prove its claims.\11\ And, as with all parties to a
contract who are faced with a breach, the Commission may forgo this
remedy, opting not to dedicate resources to reviving a once-settled
case. Moreover, district courts have discretion to deny the
Commission's request to return a case to the active docket in the event
the Commission does seek relief in the wake of a breach. We are not
aware of any instance where the Commission has sought to reopen a
district court action or administrative adjudication following a
violation of a no-deny provision, and there are no reported opinions
where a court has ruled upon such a motion.
---------------------------------------------------------------------------
\11\ There is a parallel procedure in administrative
adjudications. In that context, when the Commission has accepted
offers to settle, it has done so pursuant to Rule 202.5(e).
Respondents have agreed not to publicly deny the allegations in the
order instituting proceedings, and they further agreed that if they
breached that agreement, Enforcement staff could ask the Commission
to reopen the action against them.
---------------------------------------------------------------------------
In recent years, there have been several challenges to no-deny
settlements. Some defendants made unsuccessful efforts to alter no-deny
provisions years after they agreed to consent judgments, arguing that
the no-deny provisions violated their First Amendment rights and that
the Commission did not comply with the Administrative Procedure Act in
adopting the policy.\12\ Other parties have challenged the use of no-
deny provisions because they claimed they wanted to publish the speech
of those who agreed to no-deny provisions.\13\ In a petition for
rulemaking submitted to the Commission in 2018 and renewed in 2023, a
petitioner asked the Commission to amend Rule 202.5(e) to provide that
a defendant can consent to a judgment in which the defendant admits,
denies, or neither admits nor denies the
[[Page 29894]]
allegations in the complaint.\14\ The Commission denied the petition
(with one Commissioner issuing a statement dissenting from the
denial).\15\
---------------------------------------------------------------------------
\12\ SEC v. Romeril, 15 F.4th 166 (2d Cir. 2021); SEC v.
Novinger, 40 F.4th 297 (5th Cir. 2022); SEC v. Novinger, 96 F.4th
774 (5th Cir. 2024).
\13\ E.g., Powell v. SEC, 149 F.4th 1029 (9th Cir. 2025) (3 of
12 petitioners were described as media outlets that sought to report
on defendants who signed no-deny provisions); Cato v. SEC, 4 F.4th
91 (D.C. Cir. 2021) (holding that plaintiff lacked standing to seek
declaratory judgment that Rule 202.5(e) was unconstitutional).
\14\ Petition for Rulemaking, File No. 4-733 (Oct. 30, 2018),
available at <a href="https://www.sec.gov/files/rules/petitions/2018/petn4-733.pdf">https://www.sec.gov/files/rules/petitions/2018/petn4-733.pdf</a>; Renewed Petition for Rulemaking, File No. 4-733 (Dec. 20,
2023), available at <a href="https://www.sec.gov/files/rules/petitions/2023/petn4-733-renewed-petition-rulemaking-122023.pdf">https://www.sec.gov/files/rules/petitions/2023/petn4-733-renewed-petition-rulemaking-122023.pdf</a>.
\15\ Letter to Margaret A. Little, File No. 4-733 (Jan. 30,
2024) (Rulemaking Letter), available at <a href="https://www.sec.gov/files/rules/petitions/2024/4-733-letter-013024.pdf">https://www.sec.gov/files/rules/petitions/2024/4-733-letter-013024.pdf</a>. Commissioner Peirce
filed a statement dissenting from the denial of the rulemaking
petition. Commissioner Hester M. Peirce, Unsettling Silence: Dissent
from Denial of Request for Rulemaking to Amend 17 CFR 202.5(e),
available at <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-nand-013024">https://www.sec.gov/newsroom/speeches-statements/peirce-nand-013024</a>.
---------------------------------------------------------------------------
The Second and Ninth Circuits have held that the no-deny policy is
constitutional.\16\ However, two judges in the Fifth Circuit (in a
concurring opinion) have questioned whether the no-deny policy is
constitutional.\17\ And while the Ninth Circuit rejected a facial
challenge to the no-deny policy, declining to hold that the no-deny
policy is per se unconstitutional, it also noted that the policy, as
applied, could ``present different issues'' if the facts and
circumstances of particular settlements ``sweep more broadly than Rule
202.5(e) itself,'' which could implicate the ``important values
associated with permitting criticism of the government.'' \18\
Additionally, the policy has been subject to criticism in the district
courts.\19\
---------------------------------------------------------------------------
\16\ Powell v. SEC, 149 F.4th 1029 (9th Cir. 2025); SEC v.
Romeril, 15 F.4th 166 (2d Cir. 2021).
\17\ SEC v. Novinger, 40 F.4th 297, 308 (5th Cir. 2022) (Jones,
J., joined by Duncan, J., concurring).
\18\ Powell, 149 F.4th at 1045, reh'g pet. denied, 2025 U.S.
App. Lexis 27114 (9th Cir. Oct. 17, 2025). The petitioners have
filed a petition for a writ of certiorari, which is currently
pending. Powell v. SEC, No. 25-1100 (U.S.), available at <a href="https://www.supremecourt.gov/DocketPDF/25/25-1100/401007/20260316161817049_2026-03-16%20Powell%20et%20al.%20-%20Cert%20Petition%20with%20appendix.pdf">https://www.supremecourt.gov/DocketPDF/25/25-1100/401007/20260316161817049_2026-03-16%20Powell%20et%20al.%20-%20Cert%20Petition%20with%20appendix.pdf</a>.
\19\ SEC v. Moraes, 2022 WL 15774011, *3 (S.D.N.Y. Oct. 28,
2022); SEC v. Vitesse Semiconductor Corp., 771 F.Supp.2d 304, 309
(S.D.N.Y. 2011).
---------------------------------------------------------------------------
II. Discussion
A. The Commission Is Rescinding Rule 202.5(e)
After further consideration of the existing policy, the Commission
is rescinding Rule 202.5(e). The Commission initiates enforcement
actions only after determining that information obtained in an
investigation indicates that a violation of the securities laws
occurred or is about to occur.\20\ The commencement of such an
enforcement action in district court (or institution of an
administrative proceeding) reflects the Commission's intention to prove
the facts of the case as alleged based on the results of that
investigation.\21\ When the Commission chooses settlement to serve the
public interest by obtaining a more certain and faster result with
fewer expenditure of resources and less risk, it forecloses its ability
to obtain findings of fact and conclusions of law.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78u(a), (d).
\21\ In an administrative proceeding, the Commission serves in
an adjudicatory capacity.
---------------------------------------------------------------------------
The Commission adopted Rule 202.5(e) on the view that it benefits
the public interest ``to avoid creating, or permitting to be created,
an impression that a decree is being entered or a sanction imposed,
when the conduct alleged did not, in fact, occur.'' \22\ More
specifically, a defendant who later denies the allegations can create
the incorrect impression that there was no basis for the Commission's
enforcement action, but only after the Commission yielded its
opportunity to prove in court, under the rules of procedure and
evidence, the facts that led it to commence the enforcement action in
the first place.\23\ We conclude, however, that the negative effect on
the public interest from such denials may be minimal. Moreover, we
recognize that the policy itself may create the incorrect impression
that the Commission is trying to shield itself from criticism, even
though the main thrust of the policy was to allow the Commission, in
the wake of a denial, to ask for the ability to test its allegations
and legal theories.\24\
---------------------------------------------------------------------------
\22\ 37 FR at 25224; see also Rulemaking Letter, at 4 (stating
that when ``a defendant settles without admissions and then later
denies the allegations, that turnabout can negatively impact the
public interest'').
\23\ Id. at 4-5.
\24\ In Powell, the Ninth Circuit wrote that ``to the extent the
SEC's letter addressing [the] request to amend Rule 202.5(e)
advances the broader rationale that it is necessary to silence
defendants in order to promote public confidence in the SEC's work,
this rationale would be improper.'' Powell, 149 F.4th at 1044. The
Ninth Circuit further stated that ``a defendant who denies the SEC's
allegations may well undermine confidence in the SEC's enforcement
programs. But undermining confidence in the government is an
inevitable result of our robust First Amendment protections for
speech critical of the government. The SEC's valid interest in Rule
202.5(e) is thus more mechanical: that if a defendant wants to deny
the allegations, the SEC wants to be able to prove those allegations
in a particular forum, i.e., in court, with the benefits and
protections of the judicial process.'' Id.; see also Moraes, 2022
U.S. Dist. Lexis 196811, at *12 (expressing view that the
Commission's policy exists to shield the agency from criticism).
---------------------------------------------------------------------------
Four additional reasons support the Commission's recission of Rule
202.5(e).
First, the benefits to the Commission and the public from the
policy, and the only remedy available under the policy, have proven to
be limited over time. Under Rule 202.5(e), as implemented, if a
settling defendant who has agreed to a no-deny provision then publicly
denies the allegations, the Commission's only recourse is to ask a
district court to vacate the settlement (or to reopen an adjudicatory
proceeding).\25\ Thus, the policy existed in large part to ensure that
the Commission did not irrevocably cede its ability to prove the
allegations as part of a settlement. However, there is no known
instance of the Commission exercising this option for administrative
proceedings in the wake of a breach since Rule 202.5(e) was
adopted,\26\ and the Commission is not aware of any instances in which
the Commission asked a court to vacate a settlement in the wake of a
breach, or that a court has agreed to such a request and reopened an
enforcement action in the wake of a public denial.
---------------------------------------------------------------------------
\25\ The Commission cannot seek an injunction for a violation of
a no-deny provision, which is contractual in nature, and we are not
aware of any instance in which the Commission sought injunctive
relief for a claimed breach.
\26\ Powell, 149 F.4th at 1036.
---------------------------------------------------------------------------
Moreover, there is a built-in temporal disincentive to invoking
this limited remedy. As the gap in time between the settlement and a
(hypothetical) denial grows, the Commission will be less likely to
dedicate resources to reopen a case where the allegations will be
harder to prove due to the passage of time and the concomitant fading
of memories and loss of evidence. Similarly, as more time elapses from
the entry of a consent judgment containing a no-deny provision, a court
may be less likely to grant the Commission's request to reopen an older
case because of comparable procedural and evidentiary concerns.
Particularly given that the Commission has not sought to use this
remedy, any of its benefits do not justify retaining the rule.
Second, technological changes in communication, particularly use of
social media, have made the policy more challenging to implement. The
no-deny provisions that implement Rule 202.5(e) cover public denials of
allegations.\27\ The line between public and private statements,
however, is not always clear, particularly for social media
interactions that are intended for a private, self-selected community,
but nonetheless are visible to dozens of individuals. Moreover, as the
Ninth Circuit noted in upholding the no-deny policy against a facial
constitutional challenge, the language of some consents ``could be read
to sweep more
[[Page 29895]]
broadly than Rule 202.5(e) itself,'' by covering public statements that
are `` `indirectly' '' denying allegations or `` `creating the
impression' '' that the allegations are without a factual basis.\28\
Rather than have to parse whether such statements would trigger a no-
deny provision, the Commission chooses to repeal Rule 202.5(e).
---------------------------------------------------------------------------
\27\ See, e.g., n.7 (quoting sample no-deny provision from a
consent in the Novinger action, which, by its terms, only applies to
a ``public statement'' of denial).
\28\ Powell, 149 F.4th at 1044.
---------------------------------------------------------------------------
Third, eliminating Rule 202.5(e) aligns the Commission with the
majority of Federal agencies that do not have a similar rule.\29\ Most
Federal agencies have not adopted a comparable no-deny policy,
including the Department of Justice. Because nearly all other Federal
agencies can settle enforcement actions without noticeable consequence
even though the parties with whom they settle may deny the allegations
against them after the time of settlement, we conclude that rescinding
Rule 202.5(e) will not harm the public interest.
---------------------------------------------------------------------------
\29\ See Verity Winship & Jennifer K. Robbennolt, Admissions of
Guilt in Civil Enforcement, 102 Minn. L. Rev. 1077 (2018)
(discussing differences in settlement practices between Federal
regulators).
---------------------------------------------------------------------------
Fourth, rescinding Rule 202.5(e) gives the Commission more
flexibility in settling enforcement actions, which conserves resources,
provides certainty, and may speed the return of money to injured
investors (when feasible).\30\ The rule precludes the Commission from
accepting settlements that lack a no-deny provision, and thus
necessarily precludes settlements with defendants who do not wish to
waive their rights by signing a no-deny provision that imposes a
contractual obligation regarding denials that continues into the future
beyond the time of settlement. The rescission of the rule will
eliminate this restriction, allowing the Commission to better structure
settlements resulting in collectible sanctions that can be returned
(where feasible) to injured investors with fewer resources
expended.\31\
---------------------------------------------------------------------------
\30\ Armour, 402 U.S. 673 at 681 (parties settle ``after careful
negotiation'' produce ``agreement on [a consent's] precise terms,''
saving ``themselves the time, expense, and inevitable risk of
litigation,'' but also giving ``up something they might have won had
they proceeded with the litigation''); Citigroup, 752 F.3d at 295
(settlement provides ``parties with a means to manage risk'').
\31\ There is no rule equivalent to Rule 202.5(e) regarding
admissions. The Commission's rescission of Rule 202.5(e) does not
affect its discretion to settle with defendants who decline to admit
facts or liability, or its discretion to negotiate for admissions as
part of a settlement. Moreover, there is a subset of cases where the
Commission settles (or plans to settle) with a defendant or
respondent that is the subject of a parallel criminal proceeding
arising from the same or similar conduct, and where the defendant or
respondent has pleaded, or is expected to plead, guilty, or been
convicted. In those instances, there have been admissions (via an
allocution) or a finding of criminal liability. For these types of
cases, the Commission may continue to address admissions and denials
in settlement agreements to ensure consistency between the
Commission settlement and the resolution of the parallel matter.
---------------------------------------------------------------------------
B. The Commission Will Not Seek To Enforce Existing No-Deny Provisions
In light of the rescission of Rule 202.5(e), and for the same
reasons, the Commission will not enforce existing no-deny provisions in
settlements that have already been entered. To the extent a settling
defendant has previously agreed to a no-deny provision as part of a
consent judgment entered in Federal court or administrative
adjudicative order before the Commission, and the defendant then
breaches the terms of that no-deny provision, the Commission will not
seek or attempt to reopen an otherwise settled case. Rather, in the
event of a breach of an existing no-deny provision, the Commission will
take no action to ask a district court to vacate the settlement (or to
reopen an adjudicatory proceeding) in connection with the settlement
agreement and the limited relief the Commission has pursuant to its
terms.
C. Administrative Law and Other Matters
The Administrative Procedure Act (APA) generally requires an agency
to publish notice of a proposed rulemaking in the Federal Register and
provide an opportunity for public comment.\32\ This requirement does
not apply, however, to ``interpretive rules, general statements of
policy, or rules of agency organization, procedure, or practice.'' \33\
The Commission finds that the rescission of the no-deny policy
constitutes a general statement of policy and relates solely to agency
organization, procedure, or practice, and therefore notice and comment
are not required.\34\ Similarly, the provisions of the Regulatory
Flexibility Act of 1980, which apply only when notice and comment are
required by the APA or another statute, are not applicable.\35\
Additionally, rescission of the no-deny policy does not impose or
change any collection of information requirements as defined by the
Paperwork Reduction Act of 1995.\36\
---------------------------------------------------------------------------
\32\ 5 U.S.C. 553.
\33\ 5 U.S.C. 553(b).
\34\ The Commission made a similar finding in 1972 in adopting
the no-deny policy without notice and comment. See 37 FR 25224 (Nov.
29, 1972); see also Powell, 149 F.4th at 1046 (holding that the
Commission acted properly under the APA when it adopted Rule
202.5(e) without notice and comment).
\35\ 5 U.S.C. 601(2). 604(a).
\36\ 5 CFR 1320.3(c).
---------------------------------------------------------------------------
The Office of Management and Budget (``OMB'') has determined that
this action is a significant regulatory action under Executive Order
12866, as amended, and the action has been reviewed by OMB. This action
is an Executive Order 14192 deregulatory action. For purposes of
Subtitle E of the Small Business Regulatory Enforcement Fairness Act of
1996 (also known as the Congressional Review Act),\37\ OMB has
determined the final rule is not a ``major rule.''
---------------------------------------------------------------------------
\37\ 5 U.S.C. chapter 8.
---------------------------------------------------------------------------
The rescission of this policy statement does not impose any new
rules, regulations, or other requirements on non-agency parties, but it
could expand the range of possible settlements in Commission
enforcement actions compared to when the policy was in place. Different
parties have different goals when approaching possible settlement, and
it is difficult to estimate how important the ability to deny
allegations may be to certain parties or whether parties may change
their approach to settlement negotiations following this rescission. To
the extent that more parties enter into settlements with the Commission
as a result of the rescission, those settlements could reduce
litigation costs for such parties and the Commission and help to
conserve judicial resources.
The APA generally requires that an agency publish an adopted
substantive rule in the Federal Register 30 days before it becomes
effective.\38\ This requirement, however, does not apply to
``interpretative rules and statements of policy,'' nor does it apply if
the agency finds good cause for making the rule effective sooner.\39\
For the reasons discussed in section II as to why we are rescinding the
no-deny policy, and because delaying the effective date could create a
period of time in which parties have an incentive to delay settlement
until the rescission is in effect, we find delaying the effective date
of this rescission is unnecessary and would be contrary to the public
interest, and thus we find good cause to make the rescission effective
[upon publication in the Federal Register]. For the same reasons, this
rescission may take effect [upon publication in the Federal Register]
pursuant to 5 U.S.C. 808(2).
---------------------------------------------------------------------------
\38\ 5 U.S.C. 553(d).
\39\ Id.
---------------------------------------------------------------------------
Statutory Authority
This release is being adopted pursuant to section 19 of the
Securities Act of 1933, sections 21 and 23(a) of the Securities
Exchange Act of 1934, section 38 of the Investment Company Act of 1940,
and section 211 of the Investment Advisers Act of 1940.
[[Page 29896]]
List of Subjects in 17 CFR Part 202
Administrative practice and procedure.
For the reasons set out in the preamble, the Commission is amending
title 17, chapter II of the Code of Federal Regulations as follows:
PART 202--INFORMAL AND OTHER PROCEDURES
0
1. The authority citation for part 202, continues to read in part as
follows:
Authority: 15 U.S.C. 77s, 77t, 77sss, 77uuu, 78d-1, 78u, 78w,
80a-37, 80a-41, 80b-9, 80b-11, and 7202, unless otherwise noted.
* * * * *
0
2. Amend Sec. 202.5 by removing and reserving paragraph (e).
By the Commission.
Dated: May 18, 2026.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-10132 Filed 5-20-26; 8:45 am]
BILLING CODE 8011-01-P
</pre></body>
</html>Indexed from Federal Register on May 21, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.