On March 10, 2025, the U.S. Securities and Exchange Commission (SEC) announced its final rule rescinding the delegation of authority that had allowed the SEC’s Director of the Division of Enforcement’s (“Director”) to “issue formal orders of investigation”—i.e., the authority to unilaterally open new investigations and issue subpoenas.¹

For the past 15 years, the SEC has afforded the Director the discretion to authorize and open formal investigations and issue subpoenas on behalf of the agency. This final rule effectively returns that authority solely to the SEC’s five-member Commission, restoring the pre-2009 framework. In other words, the Commissioners will exercise greater (and exclusive) control over whether to authorize formal orders to open investigations and issue subpoenas.

According to the SEC, the change is based on its “experience with its nonpublic investigations” and “is intended to increase effectiveness by more closely aligning the Commission’s use of its investigation resources with Commission priorities."² Centralizing this power with the full Commission may introduce more deliberation and oversight—but it could also lead to fewer or delayed investigations, depending on the Commission’s priorities and capacity to act.

The new rule is set to become effective 30 days after its publication in the Federal Register.

1. 17 CFR Part 200; Release Nos. 33-11366; 34-102552; IA-6862; IC-35492 (March 10, 2025), available at https://www.sec.gov/files/rules/final/2025/33-11366.pdf.

2. Id.