Summary

  • Since October 2, one eligible commissioner can form the SEC's quorum for a particular matter when all other serving commissioners are disqualified from it. Three remains the ordinary quorum.
  • James McRitchie's petition seeks withdrawal or suspension and public comment. It has not, by itself, stopped the rule; the records examined do not establish that the new exception has been used.

Before a company has to live with a new SEC rule, how many commissioners should have a chance to challenge its reasoning? In one newly permitted situation, the answer is that a single eligible member can act, with no second commissioner able to take part. The others may still hold office; they are disqualified from that particular matter.

Think, for illustration, of a rule about information companies must give investors. A company cares about what it must prepare; an investor cares about what the information will reveal. If only one commissioner were eligible to consider that matter, the new exception would remove the need to wait for a second. It would also remove the chance for that second member to challenge the reasoning before the vote. This is not a report of such a rule or a prediction of its adoption. It explains why a change in the headcount can matter beyond the meeting room.

The exception the SEC once left out

The ordinary quorum remains three. There was already a separate escape route for vacancies: if fewer than three commissioners held office, their number was enough. One commissioner could therefore constitute a quorum when that person was the only commissioner in office. The new rule did not invent that possibility.

It changes the other calculation: serving commissioners minus those disqualified from a particular matter. In 1995, the SEC allowed two eligible members to form a quorum in that situation. It expressly said that extending the same arrangement to one was not necessary at the time. The 2026 amendment adds that missing case.

Consider the arithmetic, not a reported incident. If three commissioners hold office and two are disqualified from a matter, one remains eligible. The amended rule makes that one a quorum for that matter. Mere disagreement or failure to attend a meeting does not meet the stated disqualification condition. Nor does the exception give the chair a general right to decide alone.

The distinction also helps explain why the statutory five-member commission and a smaller quorum are compatible. The statutory composition clause describes the body's membership; it does not mean all five must vote on every decision.

Three approved a route to one

Atkins, Peirce and Uyeda all approved the amendment on September 30, according to the SEC's voting record. It was published and took effect on October 2. That three-person adoption vote is not evidence of a later one-person decision.

The SEC describes the change as an internal organisational measure that promotes flexibility and finality without substantially affecting outsiders' rights or obligations. On that basis it did not run prior notice and comment. This is the agency's legal position, not a court's resolution of the dispute.

McRitchie challenges that description. His petition, dated September 30 and docketed on October 2 as 4-938, argues that decisions affecting investors and regulated businesses cannot be treated as merely internal housekeeping. He seeks rescission, or at least suspension and public comment, and disclosure of the disqualifications and reasons that produce a one-member quorum. Those are requests, not conditions already written into the rule.

The amendment itself adds no express public reporting step for this particular trigger. That does not erase other disclosure or recusal rules. It leaves a narrower, practical question: when the exception is invoked, what record will let an outsider follow the count?

The comments page lists a submission from J. Burr Reddig received on October 5, without describing its position. As of the October 19 review, the examined SEC pages still identify a final, effective rule and a petition, with no disposition displayed on the petition page. They do not establish an actual use of the new exception. The telling document will be more than another argument about one-person authority: it will be a decision showing why only one person could take part.

Sources and original records