This week, the SEC announced that it had approved several amendments to its rules of practice regarding administrative proceedings. Most notably, the new rules provide parties to APs -- for the first time -- with the opportunity to conduct a limited number of depositions. The SEC also made several other minor tweaks to rules governing the timelines of administrative proceedings, the admissibility of certain types of evidence, and other rules.

The approved amendments in the Final Rule include:

Initial decision of hearing officer and timing of hearing (Rule 360):  Orders instituting proceedings will now designate the time period for preparation of the initial decision as 30, 75 or 120 days from the completion of post-hearing or dispositive motion briefing or a finding of a default.  In addition, the length of the prehearing period will be extended from four months to a maximum of 10 months in certain cases.  

Depositions (Rule 233):  Parties in 120-day proceedings will have the right to notice three depositions per side in single-respondent cases and five depositions per side in multi-respondent cases. Each side may also request an additional two depositions. 

Dispositive motions (Rule 250):  Parties will be able to file three types of dispositive motions at different stages of an administrative proceeding.  

Evidence (Rule 320):  "Unreliable" evidence is now expressly excluded from evidence and hearsay may be admitted if it is relevant, material, and reliable.

These amendments and others approved this week will become effective 60 days after publication in the Federal Register.


The new rules were approved after the SEC reviewed comments on proposed amendments that the SEC posted on September 24, 2015. According to the SEC, it received 13 comment letters in response to the proposal that were generally supportive. Several commenters asserted that the proposed amendments were too "incremental" and others "focused on the legitimacy of the Commission’s administrative forum" -- a controversial issue that is now being actively litigated in numerous courts. As discussed here, in June 2016 the Eleventh Circuit joined three other circuits in rejecting constitutional challenges to the SEC's use of APs.  


The SEC stated that the overall legitimacy of its APs was "beyond the scope of the proposed amendments."