I’ve seen this movie before and it’s not as scary as you would think. When I worked at the SEC during the mid-‘90s, the SEC only had two Commissioners for a spell – Chair Arthur Levitt and Commissioner Steven Wallman – and the only odd thing about it was that it looked a little silly during an open (or closed) Commission meeting as only two people would be sitting up on a dais built for five.
And since it appears that the SEC won’t likely be holding many – or any – open Commission meetings for the foreseeable future (see this recent blog), we won’t be faced with that type of awkwardness.
Let me back up. Since Commissioner Hester Peirce is close to having her term expired, she will be leaving for academia in November (her term actually expired in June 2025 but she is allowed to serve a 18-month extension – and that soon will expire). According to this recent speech, she is moving to the beach.
It’s possible that someone will be nominated and confirmed as a Commissioner by then to replace her – or fill one of the other two open slots – but it’s possible that the Commission would merely consist of Chairman Atkins and Commissioner Uyeda for a spell.
Would a Commission consisting of two people be capable of getting any work done? Would they reach quorum to be able to conduct business?
The answer is “yes, there is a Rule of 2” that was adopted in 1995. The SEC’s quorum rule states that a minimum of three members is generally required to conduct official business – but the “Rule of 2” flexibly allows for a quorum of two members during personnel shortages, vacancies or recusals.
Specifically, Section 200.41 ‘Quorum of the Commission’ provides: “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 §200.60 or are otherwise disqualified from such consideration, is two, two members shall constitute a quorum for purposes of such matter.”
Authored by
Broc Romanek