Administrative Law

Who actually writes the rules

A proposed federal rule can run to hundreds of pages, written for specialists. Since 2023, though, the Administrative Procedure Act has required every notice of a proposed rule to point to a plain-language summary of 100 words or fewer, posted on Regulations.gov. That summary is your way into this activity. You pick a proposed rule, trace it to the agency and the statute behind it, and file a comment the agency has to consider. A comment lands only when it speaks to what the agency may do and how it must do it.

You write to an agency rather than to Congress because of delegation. Congress writes statutes in broad strokes, such as honest markets or safe workplaces, and hands the detail to a body of specialists. Those bodies write most of the binding requirements a business actually meets. So the questions that matter are who they are, where their power comes from, and how they turn a statute’s goal into a rule you must follow.

Where an agency’s power comes from

An agency has only the power Congress gives it, and the grant comes in enabling legislation. Sometimes the words are blunt. The Securities Exchange Act of 1934 says, “There is hereby established a Securities and Exchange Commission,” and then assigns the new agency its work. The same statute that grants the power also fences it in.

The fence is real. In National Ass’n of Private Fund Managers v. SEC, 103 F.4th 1097 (5th Cir. 2024) (opens in a new tab), the Fifth Circuit struck down an SEC rule governing private investment funds. The provisions the agency relied on did not authorize the rule, so “no part of it can stand.” Having found no authority, the court never reached the challengers’ other arguments. Authority comes first, and an agency that reaches past its statute loses before a court looks at anything else.

Who decides what the statute allows? A court does, on its own reading. Since Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) (opens in a new tab), judges must exercise independent judgment about an agency’s authority. An ambiguous statute no longer means the agency’s reading wins.

The SEC is an administrative agency: a body in the executive branch whose specialists write and enforce the rules in their field. Congress has neither the time nor the technical depth to draft every disclosure form, so it delegates the detail. That delegation runs the modern regulatory state. It is also contested, because rule-writing power in the hands of officials no one elected sits uneasily with the separation of powers.

From a statute’s goal to a binding rule

What a delegation produces is a regulation, and securities fraud shows why a business reads the regulation first. Section 10(b) of the Exchange Act makes it unlawful to use a “manipulative or deceptive device” in connection with buying or selling a security. But the ban reaches only conduct that violates rules the SEC prescribes, so the statute leaves the specifics to the agency.

The SEC supplied them in Rule 10b-5. Among other things, the rule forbids an untrue statement of a material fact in connection with buying or selling a security. That is why most securities-fraud suits are brought under Section 10(b) and Rule 10b-5 together: the statute’s ban works through the rule. A validly issued regulation binds the public as firmly as a statute does. That is why the law cares so much about how one gets written.

The rules for making rules

Because a regulation binds like a statute, an agency cannot simply announce one. The Administrative Procedure Act sets the procedure, both for making rules and for deciding cases. It is the check on delegation: it makes the agency work in public and explain itself.

The APA’s procedure for rules is rulemaking. To create, change, or repeal a regulation, the agency publishes a proposal, takes comment, and issues a final rule with a statement of its basis and purpose. Section 553 of the APA (opens in a new tab) lays out those steps for the common kind, informal or notice-and-comment rulemaking.

The requirement has teeth. In 2023 the SEC adopted a rule requiring companies to report, each quarter, day-by-day data on their stock buybacks and to explain why they bought back their own shares. In Chamber of Commerce of the U.S. v. SEC, 85 F.4th 760 (5th Cir. 2023) (opens in a new tab), the Fifth Circuit held that the agency had acted arbitrarily. It had failed to respond to the challengers’ comments and failed to weigh the rule’s costs and benefits properly. The court found the 45-day comment period long enough; the trouble was what the SEC did with the comments once they arrived. The court sent the rule back to the SEC with thirty days to fix it. Challengers often win this way, without ever proving that a rule is unwise.

Your window into the process

Notice and comment is the stage where an outsider can move a rule. The agency publishes its proposal in the Federal Register (opens in a new tab) and opens a window, usually 30 to 60 days, for anyone to file written comments. It must then answer the significant ones. In the buyback case, the court counted among them any comment that, “if true and adopted would require a change in an agency’s proposed rule.”

The buyback comments met that test because they were specific. The SEC had asked the public for data to measure the rule’s economic effects, and the challengers answered with three ways to do it, each pointing to existing datasets or studies. The SEC admitted it never considered any of them. Speculation with no evidence behind it, the court noted, is a different matter. A comment that only says “I support this” or “I oppose this” gives the agency nothing it must answer.

Your comment will not read like the Chamber of Commerce’s, and it does not need to. It needs one specific point, with a reason behind it, that the agency would have to answer. Find a rule still open on Regulations.gov (opens in a new tab) and start with its plain-language summary. Then hand the full rule to the Rule Analyst in the Administrative Law activity and find the statute the agency says gives it power. Make your point one the agency cannot skip.