A Paul Atkins-led Securities and Exchange Commission will have different regulatory and enforcement priorities than under former Chair Gary Gensler, but it will still strongly oversee the nation’s capital markets and prosecute wrongdoers when needed, SEC Commissioner Hester Peirce said March 6.
Peirce, a Republican who’s been on the commission since 2018, said registrants should not expect a “free pass” from the new Republican-led SEC. “I will tell you you’re not doing anyone favors by taking that kind of attitude because the desire to work with industry is a desire to take a shared goal of getting compliance right, of getting the rule set right, of getting implementation right and working together toward that end, but if we think that there are people who are not acting in good faith it really corrupts that whole effort,” Peirce said at the Investment Adviser Association’s annual compliance conference in Washington.
President Donald Trump has nominated Atkins, a former SEC commissioner and CEO of Patomak Global Partners, to lead the agency. Atkins is expected to be friendlier to the regulated financial industry. He’s awaiting Senate confirmation, though the Senate Banking Committee has yet to schedule his confirmation hearing.
Karen L. Barr, president and CEO of the IAA, asked Peirce whether the SEC will likely move forward with rule proposals issued under Gensler that were not finalized, such as one dealing with artificial intelligence conflicts of interest and another to require enhanced disclosure from advisers regarding their environmental, social and governance investment practices.
“I’m not going to make perditions about what will be on Chairman Atkins’ agenda, but I would be very surprised if he just took Chair Gensler’s agenda and adopted it as his own,” Peirce said. “So that’s as much comfort as I can give you.”
Barr's discussion with Peirce was less confrontational than her discussion with Gensler at last year's conference.
Peirce was also asked about the likely budget and staffing cuts coming to the SEC due to Trump administration and Elon Musk’s "Department of Government Efficiency" priorities.
Of note, the SEC is now offering eligible employees a $50,000 incentive to resign or retire by April 4, according to an email reviewed by Bloomberg.
“We all have a shared goal of investor protection,” Barr said. “We want to see a strong and robust SEC out there making sure that we have a trustworthy industry, too. It’s in everyone’s interest to have a strong and well-funded SEC.”
In response, Peirce credited the SEC staff and the regulations they craft and enforce as the reason the nation has strong capital markets.
Additionally, “We are committed to keeping the SEC functioning well and yes, we will see people leave,” Peirce said. “And I will tell you that some of those departures are going to be very hard for me personally as well as for the agency because we’ll lose some of that wealth of knowledge that they have. But at the same time, there’s really deep talent there and so we will do the best to shepherd and protect the folks who are there as they develop even deeper knowledge and expertise.”
