Commission Quorum Requirement

Issuing agencies

Abstract

The Securities and Exchange Commission ("Commission") is amending its rules concerning the circumstances under which a quorum of the Commission is present. The amendments are designed to promote flexibility and finality of agency rulemaking.

Full Text

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<title>Federal Register, Volume 91 Issue 190 (Friday, October 2, 2026)</title>
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[Federal Register Volume 91, Number 190 (Friday, October 2, 2026)]
[Rules and Regulations]
[Pages 62654-62655]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-20262]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-106537]


Commission Quorum Requirement

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
amending its rules concerning the circumstances under which a quorum of 
the Commission is present. The amendments are designed to promote 
flexibility and finality of agency rulemaking.

DATES: This rule is effective on October 2, 2026.

FOR FURTHER INFORMATION CONTACT: Natalie E. Shioji, Senior Special 
Counsel, Office of the General Counsel, at (202) 551-5100.

SUPPLEMENTARY INFORMATION:

I. Discussion

    The Commission is modifying 17 CFR 200.41, which establishes the 
Commission's quorum requirement. Three commissioners will continue to 
constitute a quorum of the Commission, with two important exceptions. 
First, consistent with the current rule, if the number of commissioners 
in office is two or one, that number is sufficient for a quorum. 
Second, if the number of commissioners in office minus the number 
disqualified from consideration with respect to a matter is two or one, 
then that number of commissioners constitutes a quorum for purposes of 
that matter.
    The Securities Exchange Act of 1934 (``Exchange Act''), unlike many 
statutes that establish Federal agencies, does not establish a quorum 
requirement for the Commission. The Commission historically had a 
general practice that three members constituted a quorum, and in 1995, 
the Commission adopted a rule formally establishing that practice as a 
quorum requirement.\1\ That rule provided that if the number of 
Commissioners in office is less than three, then a quorum would consist 
of the number of Commissioners in office, and it further provided that 
on any matter of business as to which the number of Commissioners in 
office, minus the number of Commissioners who were disqualified from 
consideration of that matter, is two, then two Commissioners would 
constitute a quorum.\2\ The Commission stated, however, that it did not 
believe that it was necessary at that time to provide that one 
Commissioner may constitute a quorum when disqualifications resulted in 
only one Commissioner being available to deal with a particular 
matter.\3\
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    \1\ See 17 CFR 200.41.
    \2\ Id.
    \3\ See Establishment of Commission Quorum Requirement, Release 
No. 34-35548 (Mar. 30, 1995) [60 FR 17201 (Apr. 5, 1995)].
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    The Commission has reconsidered its approach to quorum. In prior 
years, the Commission has occasionally been in the position of having 
fewer than three members and believes it prudent to adapt its quorum 
rule to further accommodate that contingency. Moreover, the Commission 
has found that situations often arise in which one

[[Page 62655]]

or more Commissioners have disqualified themselves or are otherwise 
disqualified from participating in a matter.\4\ When such situations 
arise, it is important that the Commission be able to continue to 
conduct business. Accordingly, the Commission is amending the quorum 
rule to specify that, in a situation in which only one Commissioner is 
able to participate in a matter because all other Commissioners 
currently in office are disqualified from participating in that matter, 
the remaining member would constitute a quorum for that particular 
matter.
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    \4\ See 17 CFR 200.60.
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II. Other Matters

    The Commission finds, in accordance with the Administrative 
Procedure Act (the ``APA''), that these amendments relate solely to 
agency management and organization and do not constitute a substantive 
rule.\5\ Accordingly, the APA's provisions regarding notice of proposed 
rulemaking and opportunity for public comment are not applicable. These 
amendments do not substantially affect the rights or obligations of 
non-agency parties and pertain to the management of internal Commission 
operations. The changes are effective on October 2, 2026. For the same 
reasons, the provisions of the Small Business Regulatory Enforcement 
Fairness Act are not applicable.\6\ Additionally, the provisions of the 
Regulatory Flexibility Act,\7\ which apply only when notice and comment 
are required by the APA or other law, are not applicable.\8\ These 
amendments do not contain any collection of information requirements 
within the meaning of the Paperwork Reduction Act of 1995.\9\ Further, 
because these amendments impose no new burdens on private parties, the 
Commission does not believe that the amendments will have any impact on 
competition for purposes of section 23(a)(2) of the Exchange Act.\10\
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    \5\ See 5 U.S.C. 553.
    \6\ See 5 U.S.C. 804(3)(C) (the term ``rule'' does not include 
``any rule of agency organization, procedure, or practice that does 
not substantially affect the rights or obligations of non-agency 
parties'').
    \7\ 5 U.S.C. 601 et seq.
    \8\ See 5 U.S.C. 601(2).
    \9\ See 44 U.S.C. 3501 et seq.; 5 CFR 1320.3.
    \10\ 15 U.S.C. 78w(a)(2).
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Statutory Authority

    The amendments are adopted pursuant to statutory authority granted 
to the Commission, including sections 4(a) and 23(a) of the Exchange 
Act, 15 U.S.C. 78d(a) and 78w(a).

List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies).

Text of Rule Amendments

    For the reasons set out in the preamble, the Commission is amending 
title 17, chapter II, part 200 of the Code of Federal Regulations as 
follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

0
1. The authority citation for part 200 continues to read in part as 
follows:

    Authority: 5 U.S.C. 552b; 15 U.S.C. 78d and 78w.


0
2. Revise Sec.  200.41 to read as follows:


Sec.  200.41  Quorum of the Commission.

    A quorum of the Commission shall consist of three members; 
provided, however, that if the number of Commissioners in office is 
less than three, a quorum shall consist of the number of members in 
office; and provided further that on any matter of business as to which 
the number of members in office, minus the number of members who either 
have disqualified themselves from consideration of such matter pursuant 
to Sec.  200.60 or are otherwise disqualified from such consideration, 
is two or one, that number of members shall constitute a quorum for 
purposes of such matter.

    By the Commission.

    Dated: September 30, 2026.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-20262 Filed 10-1-26; 8:45 am]
BILLING CODE 8011-01-P


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