The SEC attempts to evaluate whether the cost of a proposed disclosure is more or less than the benefits provided to the public by conducting a cost-benefit analysis. This involves rule writers working alongside economists to identify and quantify the costs (including indirect costs) and benefits of a proposed rule. Additionally, it requires that any uncertainty underlying the estimation of costs and benefits is identified and discussed. If costs and benefits cannot be quantified, a report should be issued explaining the reason why quantification is not possible, and an analysis of the expected costs and benefits should be provided.

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