The SEC had adopted Rule 151A, but the rule had not yet gone into effect. In the earlier appeal, petitioners argued the SEC failed properly to consider the rule's effect on efficiency, competition, and capital formation under § 2(b). On rehearing, the SEC argued it was likely to reissue Rule 151A, but acknowledged it was still analyzing the effect of the rule on the law of each state. Until Rule 151A took effect, state-law regulations remained in place.
Issue
When the SEC's § 2(b) analysis is deficient, should the court vacate Rule 151A or leave it in place while the agency conducts further analysis? More generally, how does the Allied-Signal remedial analysis apply here?
Rule
Under Allied-Signal, the decision whether to vacate depends on (1) the seriousness of the order's deficiencies, including the extent of doubt whether the agency chose correctly, and (2) the disruptive consequences of an interim change that may itself be changed.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
The Federal Markets Commission adopted a rule requiring certain retirement products sold in Phoenix to be treated as federal securities. A court finds the Commission failed to complete the statute-required analysis of the rule's effects on efficiency, competition, and capital formation. The rule is scheduled to take effect in eight months, and until then Arizona insurance rules continue to govern those products.
Under the governing remedial approach, what is the most likely disposition?
Explanation. The applicable test asks about (1) the seriousness of the deficiency and the resulting doubt whether the agency chose correctly, and (2) the disruptive consequences of interim change. A deficient required analysis is a serious defect, and where the rule has not yet taken effect and state regulation remains in place, vacatur is not disruptive and instead preserves the status quo.