SEC Rewrites Its Quorum Rule as Only Two Commissioners Remain

The Securities and Exchange Commission is built for five commissioners. Its own commissioners page lists two: Chairman Paul S. Atkins, in the role since 2025 with a term that runs to 2031, and Commissioner Mark T. Uyeda, who has served since 2022 and whose term expires in 2028.

That short list matters more now because of a rule that took effect on October 2. In Release No. 34-106537, dated September 30, the SEC amended its quorum rule. That's the count of commissioners who must be present before the agency can formally act.

The SEC says the amendments are "designed to promote flexibility and finality of agency rulemaking." If you're waiting on crypto rules, that sentence is the reason to keep reading.

What the New Quorum Rule Actually Says

Three commissioners still make a quorum by default. The rule then carves out two exceptions:

• If only two commissioners, or only one, are in office, that number is a quorum.
• If the commissioners in office, minus those disqualified from a particular matter, add up to two or one, that number is a quorum for that matter.

The genuinely new piece is the smallest case. When every other commissioner is disqualified, the one who remains is a quorum for that matter.

There's a nice bit of history in the release. The SEC's 1995 version already let two commissioners form a quorum after disqualifications. At the time, the agency said it did not think it was "necessary at that time to provide that one Commissioner may constitute a quorum." Thirty-one years later, it decided otherwise.

Why There Was No Public Comment

Most SEC rules go out as proposals first, so the public can weigh in. This one didn't. The agency adopted it directly, saying it relates solely to agency management and is not a substantive rule, so the usual notice and comment requirements don't apply.

The SEC also points out that the Exchange Act itself does not set a quorum requirement for the Commission. In other words, the agency is writing its own house rules here, and it treated them like house rules.

It's a modest-looking change. It's also a rule about how many people it takes to make every other rule, which is why it has drawn attention well beyond the usual readers of SEC release numbers.

The Crypto Proposal Already on the Table

The timing lands on a live crypto file. On August 18, the SEC proposed Regulation Crypto Assets. It includes a conditional safe harbor from the term "investment contract" in the definitions of "security" in the 1933 and 1934 securities laws.

The proposal also sets out two new exemptions for raising money:

• A one-time exemption for offerings of up to $5 million over a four-year period.
• A second exemption for offerings of up to $75 million in each 12-month period.

It would also preempt state securities registration and qualification requirements for offerings under those exemptions and for certain secondary trades. That's a meaningful detail for small teams, who would otherwise face a patchwork of state filings.

Atkins framed the plan as a bridge, not a replacement:

"as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital"

The comment period runs for 60 days after the proposal is published in the Federal Register. The SEC's release doesn't give that publication date, so the exact closing day isn't confirmed here.

A Rulemaking Path That Doesn't Wait for Congress

Put the pieces together and the picture is fairly clear. Regulation Crypto Assets is agency rulemaking, not legislation. Turning it from a proposal into a final rule takes a Commission vote, not a bill. And the new quorum rule spells out that a Commission of two, the number now listed on the SEC's own page, can still act.

The quorum rule doesn't decide what any crypto rule says. A final version still has to come through the comment process, and the text could change along the way.

There are also gaps worth naming. Reports say Commissioner Hester Peirce left earlier this month, but the SEC page doesn't say when or why the seat emptied. Whether new nominations are coming isn't confirmed either.

The next marker to watch is the end of the comment window on Regulation Crypto Assets. After that, two commissioners will decide what happens to it. And under the rule that took effect on October 2, if one of those two seats empties as well, the commissioner left in office would count as a quorum.