Abstract

This symposium invites reflection on a number of important questions concerning the independence of the independent regulatory agencies. Three such questions are briefly examined in this essay: First, what is the nature of an independent agency? Second, why should regulatory agencies be independent? Finally, what constrains, and what ought to constrain, an agency's independence? These questions are considered against the backdrop of the legal debate about the constitutional legitimacy of independent regulatory agencies that has been raging since Congress created the first such agency a hundred years ago. The thoughts and conclusions offered in this essay draw on the history and recent experience of the United States Securities and Exchange Commission ("SEC" or "the Commission"), long recognized as one of the finest independent agencies. I. WHAT IS AN INDEPENDENT REGULATORY AGENCY? An independent regulatory agency is a government entity that frequently exercises executive, judicial and legislative power over a specifically defined area of government interest. In a word, independent agencies are the fourth branch of government, operating separately from but under the oversight or review of the other three. The SEC is a prime example of such an agency. The SEC was established by Congress in 1934. Its enabling legislation is the Securities Exchange Act of 1934 (the 1934 Act). That Act 1 provides that the Commission be composed of five commissioners (including a Chairman) appointed by the President with the advice and consent of the Senate. The commissioners are appointed for fixed terms of ...

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