When Paul Atkins took the helm of Wall Street’s top regulator, he came with a long to-do list: craft rules for the cryptocurrency industry, make initial public offerings “great again” and ease financial reporting for public companies.
A year into the job, there are few check marks next to those big tasks.
That’s been a disappointment for some industry players, who cheered when President Donald Trump nominated Atkins to lead the Securities and Exchange Commission. A familiar face in the building, he was known for favoring light-touch regulation as an SEC staffer in the 1990s before becoming a commissioner during pivotal moments like the fallout from the Enron Corp. accounting scandal and the start of the financial crisis.
That agency experience and years as a private-sector consultant cast him as an ideal candidate to get a pro-business agenda rolling, knowing rules can take around 18 months to two years to complete due to the necessary votes and public input. But even a Washington insider like Atkins can get off to a slow start.
Three things have held up his agenda: A record-setting government shutdown halted most SEC operations for about six weeks in the fall, the regulator has 18% fewer employees after Trump’s push to shrink the federal government and independent agencies now need to seek the White House’s approval before proposing major regulations.
Atkins recently said he plans to release about 30 rule proposals this year. More than two-thirds of those will be related to corporate finance, such as scaling back corporate disclosures, according to an SEC official who asked not to be identified discussing non-public deliberations.
Atkins must speed up rulemaking this year or risk failing to “future-proof” his plans. That’s the phrase he’s been using to describe formal rules, which are less vulnerable to policy pendulum swings than the informal advisories and guidance the agency has so far been issuing.
“Rulemaking is necessary for so many of these initiatives,” said Anna Pinedo, partner at Mayer Brown. “It’s impossible to get around that.”
The agency is inching forward on some goals, including a proposal to reduce the frequency of financial reporting called for by Trump that Atkins then vowed to fast-track. That measure was recently sent to the White House for review under the new Trump-era process, along with a proposal to modify hedge fund disclosures.
Meanwhile, senior SEC officials have told industry groups in recent months to suggest ways that other policy priorities can be tackled through guidance, no-action letters or other means short of rulemaking, according to two finance industry professionals who requested anonymity to discuss private discussions.
Those types of measures can address pressing matters in the short-term but don’t carry the weight of formal rulemaking. They also can be undone easily in future administrations. Case in point: the SEC reversing Biden-era staff crypto accounting guidance three days after Trump’s inauguration.
Issuing guidance or letters can let the agency act quickly and learn how new ideas work in the market before committing to more permanent rules, the agency official said, adding that if the ideas don’t work they can be more easily scrapped.
In a statement, Atkins said the SEC under his leadership had made great strides.
“We’ve ended regulation by enforcement with a refocus on meaningful investor protection, advanced our agenda to make IPOs great again, taken significant steps to provide clarity for crypto asset markets, and initiated a robust rulemaking agenda for the year ahead,” he said.
Crypto Legislation Stalemate
The biggest priority for Atkins is writing clear rules for the digital asset industry, which he has repeatedly called “job number one” for the agency. But that effort has been partially stymied by a stalled bill in Congress to clarify the SEC’s and the Commodity Futures Trading Commission’s authorities over digital assets.
Atkins and his CFTC counterpart are moving forward for now as lawmakers consider their next steps on the legislation, which is tied up in a fight between banking and crypto groups.
The SEC recently issued commission-level guidance that indicated all but a handful of digital assets fall under the purview of the CFTC. The White House is also reviewing a new crypto rulemaking proposal, that includes providing exemptions from some securities law requirements to digital asset firms.
Atkins’ focus on crypto has also sparked tension with traditional financial firms, who for decades have held sway at the regulator. SIFMA, an investment industry trade group, and Citadel Securities, a market-maker, both raised alarms over Atkins’ ambitions to allow digital asset firms, particularly those that lack centralized corporate controls, to trade “tokenized” or digital versions of securities like stocks or bonds.
The two groups have repeatedly asked the SEC to slow down and issue formal proposals rather than offering green lights via so-called exemptive relief. “This approach would put the Commission on much firmer footing from both a procedural and substantive perspective and ensure that the tens of millions of Americans who rely on the US equity market to secure their retirement futures remain protected,” a senior Citadel Securities executive said in a December letter.
Atkins has said the SEC will release a 400-page digital asset rule proposal in the coming weeks, as well as exemptive relief for digital asset firms.
Gensler Lessons
Some industry groups are cautiously optimistic about the Washington insider’s plans amid the Trump administration’s deregulatory drive.
“He came in with a clear agenda to permanently cut unnecessary red tape, modernize outdated regulations, and strengthen capital markets to drive innovation and economic growth,” Bryan Corbett, chief executive officer of the Managed Funds Association, said in a statement. “We look forward to helping him deliver.”
And Atkins has said recently that a slew of agency proposals will be coming out soon in “all sorts” of areas.
“Just hold onto your seats, we have a lot of other things up our sleeves for the rest of the year,” he told reporters at a crypto conference in March.
But rulemaking is a lengthy process, from behind-the-scenes drafting to weighing the costs and benefits, and fending off potential industry objections and lawsuits. That makes the first and second year critical for setting an agenda and getting plans in place, especially with the potential for political winds to shift as midterm elections loom.
“If we get to the middle of the year and we don’t see anything, I’m going to be asking, ‘what’s going on?’” said George Wilson, director of the Practising Law Institute’s program focused on securities regulation.
The dearth of proposals contrasts with his predecessor, Gary Gensler, who rolled out one of the most ambitious – and contentious – agendas in modern SEC history. By this point under Gensler, the agency had already proposed significant rules on issues ranging from hedge fund fees and shorting stocks to greenhouse gas pollution and cyberattacks.
For his part, Atkins has been leery of his predecessor’s approach, according to people familiar with his thinking, after Gensler’s breakneck rulemaking pace drew criticism and legal challenges. Those lawsuits led to the dismantling of key portions of Gensler’s agenda by plaintiffs filing cases in favorable, conservative-leaning courts. A series of US Supreme Court rulings also significantly reined in the amount of discretion afforded to agencies in their rulemaking process. Those same dynamics could come into play for Atkins, as well.
While Atkins has contrasted his policies and methods in opposition to Gensler’s, the rollout of dozens of proposals over 2026 could draw some of the same critiques about overlapping comment periods and separate rules that relate to one another – such as efforts to reduce corporate disclosures while also loosening quarterly reporting requirements.
Atkins also doesn’t want to stray too far away from core SEC issues – which Gensler was frequently accused of — and has described his job as a regulator as applying the “minimum effective dose of regulation” to the markets.
“He has clearly projected an intention to be careful and deliberate,” said Stephen Cohen, a former SEC staffer who now works at law firm Sidley Austin LLP. “He’s not looking to score the max number of points in the first 12 months.”
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
