OMB’s Office of Information and Regulatory Affairs has provided interim guidance on the requirements in Section 2, “Regulatory Cap for Fiscal Year 2017,” of the Executive Order of January 30, 2017, titled “Reducing Regulation and Controlling Regulatory Costs” (“EO”).

Importantly, the guidance confirms that the EO is not applicable to independent agencies such as the SEC. According to the guidance, the requirements of Section 2 apply only to those agencies required to submit significant regulatory actions to OIRA for review under EO 12866. Nevertheless, the administration encourages independent regulatory agencies to identify existing regulations that, if repealed or revised, would achieve cost savings that would fully offset the costs of new significant regulatory actions.

In general, the guidance notes that executive departments and agencies (“agencies”) may comply with the EO by issuing two “deregulatory” actions for each new significant regulatory action that imposes costs. The savings of the two deregulatory actions are to fully offset the costs of the new significant regulatory action.

In addition, beginning immediately, agencies planning to issue one or more significant regulatory action on or before September 30, 2017, should for each such significant regulatory action:

• A reasonable period of time before the agency issues that action, identify two existing regulatory actions the agency plans to eliminate or propose for elimination on or before September 30, 2017; and
• Fully offset the total incremental cost of such new significant regulatory action as of September 30, 2017.