SEC quorum change lets lone commissioner act when all others are disqualified

The SEC's amended quorum rule took effect Oct. 2, letting a single commissioner act whenever every other sitting commissioner is disqualified from a matter. The agency adopted the change on Sept. 30, 2026, amending a quorum requirement it had used for 31 years. The effective date was the day Commissioner Hester Peirce left, a departure InvestmentNews flagged in May 2026. Chair Paul Atkins and Commissioner Mark Uyeda are the two remaining members.

At the same Sept. 30 meeting, the SEC proposed letting advisors to registered funds and business development companies charge performance fees of up to 20% of net gains. Business development companies are closed-end funds that invest in private companies. A companion proposal would loosen the rules for interval funds, which let investors redeem shares only at set intervals. Gibson Dunn reported the performance-fee proposal, according to InvestmentNews.

The package would also redefine “qualified client,” the status that decides who can be charged performance fees, to include any accredited investor. It also weighs letting CFPs, CFA charterholders and CPAs qualify as accredited investors, InvestmentNews reported. The fee and accredited-investor changes are proposals; only the quorum amendment has been adopted.

Benjamin Schiffrin, director of securities policy at Better Markets, said the quorum change reaches RIAs through the pace of SEC rulemaking rather than their daily work. “If one of the two remaining commissioners can't participate in a matter because they're disqualified from participating due to some type of conflict of interest, the one remaining commissioner can still act on behalf of the commission,” he said.

Under the prior rule, Schiffrin said, a quorum required three commissioners, or fewer if fewer held office. With two in office and one disqualified, the commission could not act. The old rule already let a lone commissioner act when only one held office; the amendment extends that to the two-in-office, one-conflicted case. His read of the practical effect: if either Atkins or Uyeda faces a conflict on an already-proposed rule, “that one commissioner can now go forward on behalf of the entire commission with the rule if that's what that one commissioner wants to do.”