Wall Street and the industry at large are keen watchers of who will take the helm — and set the agenda — at the Securities and Exchange Commission when Donald Trump returns to the presidency in January.
Former SEC Commissioner Paul Atkins emerged as Trump’s nominee on Dec. 4. Atkins is CEO of Patomak Global Partners LLC in Washington.
Atkins is “the godfather of conservative securities regulation and very well-known and experienced,” said Igor Rozenblit, managing partner at Iron Road Partners, a risk management consultancy. “He’s a relatively non-controversial pick” for the incoming Trump administration.
Enforcing and completing some rules will drop off the agency’s list while others — including controversial ones — will likely reemerge in different forms next year, industry attorneys predict.
For instance, while some predict the agency’s off-channel communications crackdown will cease, others say to expect less severe sanctions.
"In terms of off-channel and digital communications more broadly, we will likely see a bigger focus on the essentials: making sure organizations are meeting their core recordkeeping and oversight obligations, and ensuring that they have visibility into where and how their firm is doing business, whether that be on WhatsApp, text messaging, video conferencing, or AI-enabled technologies," said Robert Cruz, vice president, Regulatory & Information Governance at Smarsh. "The rules are long-standing and movement toward deregulation doesn’t change obligations to protect businesses and mitigate the risks to a customer’s information."
Also, new guidance is anticipated for Regulation Best Interest and the marketing rule.
Next year, “expect more guidance from the Commission and perhaps the reversal of some previous guidance around the SEC’s marketing rule,” Rozenblit said.
Valerie Mirko, leader of Armstrong Teasdale’s Securities Regulation and Litigation practice area, stated on a recent podcast that she expects a “slimming down” of the Reg BI guidance that came out during SEC Chairman Gary Gensler’s tenure, as well as marketing rule guidance.
While Reg BI will continue to be enforced under a new chairman, Mirko said she sees a more “back to basics” enforcement approach with “a return to the focus on conflicts and disclosure and a less intense focus on the [rule’s] Care Obligation. In practice, I expect greater focus on data driven investigations with an emphasis on conflicts and disclosure case theories. I also expect a move away from considering the facts and circumstances of individual customers.”
