The Securities and Exchange Commission (the SEC or the Commission) recently released its Spring 2025 Unified Agenda of Regulatory and Deregulatory Actions (the Agenda). While the Agenda appears undersized at 23 items compared to the 30 items that populated former Chairman Gary Gensler's Fall 2024 list, it nonetheless signals several potentially consequential rulemakings — and an equally important shift in regulatory philosophy — under newly installed Chairman Paul S. Atkins. However, it is also important to recognize that because of time lags in the development and publication of the Agenda, shifts in policy may overtake items listed. In addition, the Agenda may not include other regulatory priorities actively pursued by Commission staff, but that were not ready for publication when the Agenda was submitted to the Office of Management and Budget (OMB).
What's out may be as important as what's in. As noted in Chairman Atkins's Statement on the Spring 2025 Regulatory Agenda (Sep. 4, 2025), the latest Agenda reflects the withdrawal of a number of items from the prior Administration that "do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority." Several high-profile Gensler-era proposals have been formally withdrawn, including, for example, proposed rules addressing predictive data analytics (or artificial intelligence) for both broker-dealers and investment advisers; equity market structure proposals such as the Order Exposure Rule and Regulation Best Execution; safeguarding (or custody); outsourcing by investment advisers; cybersecurity risk management; and the proposed expansion of Regulation ATS to the ill-defined "communications protocol systems." Katten previously discussed this significant (and somewhat unusual) action taken under the SEC's new leadership.
Through the Chairman's Statement, we see a few recurring themes: (i) deregulation through, among other things, the withdrawal of many of the prior Administration's proposed rules; (ii) a priority on innovation, particularly with an eye toward providing "clear rules of the road" for the issuance, custody, and trading of crypto assets; (iii) renewed focus on the economic impacts of proposed rules (e.g., reinviting public comment on the consolidated audit trail); and (iv) not enforcing certain rules by not appealing court rulings that struck down Gensler era rules. The Commission also appears poised to level-set hotly debated topics from the Gensler era, such as the application of Rule 15c2-11 to the fixed-income market and the definition of a "dealer" under the Securities Exchange Act of 1934 (Exchange Act), and revisit some existing requirements such as the Trade Through Rule, Rule 611 under Reg NMS, and Rule 144 under the Securities Act of 1933 (Securities Act).
A few of the more significant SEC Agenda items are highlighted below.
Prerule/concept release stage:
- Asset-Backed Securities (ABS). The Commission may seek public comment on potential regulatory changes to facilitate registered offerings of ABS, including mortgage-backed securities, and other improvements to the securitization markets.
Proposed rule stage:
- Crypto. The Agenda includes potentially four
new proposed and distinct rules focused on crypto assets. These
proposed rules relate to (i) the offer and sale of crypto assets,
including certain exemptions and safe harbors, to help clarify the
regulatory framework; (ii) the custody requirements under both the
Investment Advisers Act of 1940 and Investment Company Act of 1940
(1940 Act), including how such rules address crypto assets; (iii)
market structure amendments under the Exchange Act to account for
the trading of crypto assets on Alternative Trading Systems and
national securities exchanges; and (iv) updates to modernize the
existing regulatory regime for transfer agents, including rules
relating to crypto assets and the use of distributed ledger
technology by transfer agents.
- Exempt Offerings. The agenda has potential
rule amendments to facilitate capital formation, simplify the
pathways for raising capital, and provide investor access to
historically private investments/offerings. This may include, for
example, updates to the accreditor investor standard — a
cornerstone to the private placement exemptions in Regulation D
under the Securities Act.
- Cross-Trading Rule 17a-7. Potential amendments
to Rule 17a-7 under the 1940 Act, which governs purchase/sale
transactions between a registered investment company and certain
affiliated persons. The potential amendments would seek to
modernize the conditions for and expand the availability of the
exemption with respect to such cross-trades. Amendments to Rule
17a-7 are one of a few items remaining from the prior
Administration (and regulatory agenda), in part, due to continued
challenges raised by market participants following the adoption of
amendments to the valuation rule back in 2020, which effectively
made cross-trading of fixed-income securities a rule
violation.
- Broker-Dealer and Exchange Matters. The Agenda
includes a new matter focused on adapting traditional broker-dealer
concepts — such as the net capital rule (Rule 15c3-1),
customer protection rule (Rule 15c3-3), and books and records
requirements (Rule 17a-3 and a-4) — to crypto assets. In
addition, as indicated above, other possible areas for Commission
action are the Reg NMS Trade-Through Rule; the application of Reg
ATS to government securities; and the definition of a
"dealer," including the scope of, and exceptions from,
the term "dealer." Indeed, the Commission has already
announced a roundtable to be held later this month to solicit views
on Trade-Through Rule reform. While the scope of rulemaking on the
dealer rule is unclear, the prior Commission's defeat in the US
District Court for the Northern District of Texas suggests an
expansion of that term is unlikely and that the Commission may
again be focused on providing clear "rules of the
road."
Final rule stage:
- Anti-Money Laundering (AML). The Agenda suggests that the Commission will seek to approve, alongside the Department of Treasury, final rules requiring that investment advisers implement reasonable procedures to verify the identities of their customers (CIP procedures). A corollary rule that requires investment advisers to adopt AML programs was finalized in August 2024, but its compliance date was deferred from January 1, 2026, to January 1, 2028, in part to synchronize its implementation with the intended finalization of this AML CIP rule.
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