Joint Comments on Incentive-based Compensation

To Whom It May Concern:

The Bank Policy Institute, the American Bankers Association, the Financial Services Forum, and the Securities Industry and Financial Markets Association are writing in response to your announcement on May 6, 2024, with respect to "Incentive-Based Compensation Arrangements" pursuant to section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. As you appear to acknowledge, while your release is styled as a notice of proposed rulemaking and request for public comment, it does not include other agencies required by statute to participate in any such rulemaking under Section 956.

Given that the notice will not be sent to the Federal Register, and therefore will trigger none of the rights and responsibilities of the Administrative Procedure Act, it has no legal effect. We believe that any comprehensive comment at this point would be premature and would validate an ersatz, unprecedented process.

Your document is effectively a republication of the notice of proposed rulemaking issued by the agencies in 2016 and never finalized. Industry provided robust comments on that proposed rulemaking, and it appears that none of those comments have been reflected in this proposal. As a reminder, our comments on the 2016 proposal asserted that the proposal strayed beyond the bounds of the agencies' limited statutory authority under Section 956. In particular, we highlighted that:

• While Section 956 requires the agencies to prescribe rules or regulations on incentive-based compensation arrangements, the agencies should do so with a greater recognition that the authority given to them under Section 956 is limited and specific.

Download the joint comment letter to read the full text.