The sizable learning curve of the likely next chairman of the Securities and Exchange Commission plus vacancies on the commission and in several key agency divisions should add up to an extended quiet period, veteran SEC watchers say.
“This is a good opportunity for folks to go back to the core compliance functions that they should be focusing on,” said Karen Barr, president and CEO of the Investment Adviser Association in Washington. “They can hope for a respite from the onslaught of new regulation.”
President Donald Trump selected Jay Clayton, a partner at law firm Sullivan & Cromwell LLP in New York, to be SEC chairman, his transition team said, to help create jobs “by encouraging investment in American companies, while at the same time holding regulated firms to “robust accountability.”
Mr. Clayton's expertise includes advising on public and private mergers and acquisitions transactions, and capital markets offerings. His biography shows that he has less experience dealing with the political side of regulation and enforcement.
The agency is hamstrung by three of the five commissioner slots being vacant with the departure of chairwoman Mary Jo White. There has been no movement by the Senate Banking, Housing and Urban Affairs Committee to approve the 2015 nominations of Hester Peirce and Lisa Fairfax by President Barack Obama, although Ms. Peirce is still considered in the running. Ms. Peirce is a senior research fellow and director of the Financial Markets Working Group at the Mercatus Center at George Mason University in Arlington, Va., and a former counsel for the banking committee and to former SEC Commissioner Paul Atkins.
In the meantime, current commissioners Michael Piwowar and Kara Stein are seen as canceling each other's votes on any controversial issues that might arise. Republican appointee Mr. Piwowar is considered an advocate for facilitating capital formation while Ms. Stein, a Democratic appointee, often advocates for stronger investor protections.