Potential Changes in SEC to Affect Registrants

Date01 May 2017
Published date01 May 2017
© 2017 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI 10.1002/jcaf.22269
Potential Changes in SEC to
Affect Registrants
Donald A. Walker Jr
Since the election and
the inauguration of Presi-
dent Trump in January 2017,
the Securities and Exchange
Commission (SEC) has
undergone major person-
nel changes. Many division
heads and officials have left
the agency and the president
has announced a nominee
for chairman. That nomi-
nee is perceived as being less
inclined to regulate and to
bring enforcement actions.
President Trump has indi-
cated that his goal is to reduce
regulations and especially to
reduce financial regulation
by revising Dodd-Frank and
possibly other laws such as
the Foreign Corrupt Practices
Act. Actions taken by White
House staff to monitor com-
munications of various execu-
tive agencies suggest that the
actions and communications
of the SEC will receive closer
scrutiny from and coordina-
tion with the new adminis-
tration. In addition, White
House directives limiting hir-
ing will reduce staff resources.
The top management
makeup of the Commission
is changing rapidly. The chair
of the Commission is being
replaced. The three open seats
on the Commission including
the chairman are likely to be
filled as soon as the vetting
and appointment and Senate
confirmation process can be
completed. Operations man-
agement of the Commission is
changing, along with the divi-
sional managements. There will
likely be a period of reconsti-
tuting lines of communication
and protocols and of getting
to know new colleagues and
Securities Act regis-
trants may benefit from the
announced emphasis on capital
formation, potentially experi-
encing accelerated reviews of
transactional filings resulting
from increased SEC manage-
ment pressures to focus on the
most critical disclosure issues.
Exchange Act registrants
may benefit from an atmo-
sphere in the Division of Cor-
poration Finance that encour-
ages a narrower focus on larger
issues and reduced numbers of
comments and comment letters.
With the emphasis on cur-
tailing new regulations and
revising or reducing current
regulations, and the near-
completion of rules required by
the Dodd-Frank Act, the staff
of the Division of Corpora-
tion Finance will have addi-
tional resources to accelerate
its addressing of confidential
treatment orders and no-action
and interpretive and exemptive
Staffing limitations and
changes in division heads may
result in softening aggressive
broker-dealer and transfer
agent examination plans. Staff-
ing limitations may also slow
the progress of Enforcement
Division forensic investigations
and cases if turnover tends
to increase and institutional
memory is lost. In addition,
the division and Commission
may act to reduce the number
of investigations converted to
active cases.
Whistleblowers provide
the most timely, compre-
hensive, and well-supported
indications of disclosure and
financial fraud violations, and
generally provide the most
effective and timely door

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