The Securities and Exchange Commission is reforming its priorities to align with the economic strategy of the new US administration, according to Skadden, Arps, Slate, Meagher & Flom, an international law firm.
The US regulator will most likely take a thematic approach in implementing the administration’s core principles, as the incoming SEC chairman will be a Trump appointee who shares the White House’s regulatory philosophy, said Kenneth Burdon, investment management counsel at the firm.
Acting chairman Michael Piwowar has removed the power to determine whether to open investigations from SEC staff, which better aligns with the new administration’s priorities.
But the SEC’s enforcement-minded approach, established post-2008, and President Trump’s economic growth focus is likely to spark tension between the regulator and the US government. Burdon said the SEC viewing enforcement “as a means to an end, rather than an end in and of itself” would be a “welcome pivot.”
Trump’s ‘two-for-one’ rule, requiring federal agencies to repeal two regulations for every new one introduced, does not extend to the SEC because it is independent of government, but any large-scale changes in financial regulation would require an act of Congress. As such, any roll back of key legislation, such as Dodd-Frank, is not on the horizon, the firm said.
Securities enforcement and compliance partner Colleen Mahoney said focus on technical violations is expected to be reduced as Jay Clayton, the White House’s nominee to head the SEC, does not have a white-collar defence background. Proceedings against individuals on matters of inadequate disclosures and conflicts of interest may also be pared