Securities Snapshot: 3rd Quarter 2025

As fall approaches, the SEC has kept a brisk pace on both proposed rulemaking and regulatory initiatives in the third quarter. In this Snapshot, we review the SEC's decision to decrease registration fees for issuers as well as recent comment letters received following this summer's executive compensation roundtable. We also examine new leadership at the Division of Corporation Finance, with Chairman Paul Atkins heralding a "new day" at the agency. Finally—outside the SEC—we address a recent push by Nasdaq to trade tokenized securities, underscoring the market's appetite for innovation as regulators weigh how to integrate crypto assets into existing legal frameworks.

A "New Day" at the SEC

On September 4, 2025, the Office of Information and Regulatory Affairs published the semi-annual Unified Agenda of Regulatory and Deregulatory Actions, which includes the SEC's Spring 2025 agenda. Although released in September, the Spring agenda remains the operative roadmap for the Commission's near-term priorities and offers the first formal glimpse of Chair Paul Atkins' regulatory philosophy following last year's presidential election. Indeed, Chairman Atkins noted the agenda reflects a "new day" at the SEC—emphasizing the Commission's renewed focus on supporting innovation, capital formation, market efficiency, and investor protection.

The Spring 2025 agenda features a number of deregulatory rule proposals, including:

• Crypto Assets: four proposed rules relating to (i) the offer and sale of crypto assets, including certain exemptions and safe harbors; (ii) custody requirements under both the Investment Advisers and Investment Company Acts of 1940; (iii) the trading of crypto assets on national securities exchanges; and (iv) updates to modernize the existing regulatory structure for transfer agents.
• Foreign Private Issuer Eligibility: seeking public comment on the definition of a foreign private issuer ("FPI"), to account for developments within the FPI population since the SEC last conducted a broad review of reporting FPIs and the eligibility criteria for FPI status.
• Exempt Offerings: proposed amendments aimed at facilitating capital formation, simplifying the pathways for raising capital, and expanding investor access to historically private offerings, including possible updates to the accredited investor standard.
• Rule 144 Safe Harbor: reintroducing proposed amendments to Rule 144, a non-exclusive safe harbor that permits the public resale of restricted or control securities if the conditions of the rule are satisfied, to increase the availability of the safe harbor.
• EGC Accommodations and Updates to Filer Status for Reporting Companies: proposed rule amendments to expand accommodations available to emerging growth companies and to rationalize filer statuses to simplify the categorization of registrants and reduce their compliance burdens.
• Shelf Registration Modernization: proposed rule amendments to modernize the shelf registration process and reduce compliance burdens.
• Rationalization of Disclosure Practices: proposed rule amendments to "rationalize disclosure practices" to facilitate material disclosure by public companies.

At the same time, several previously pending initiatives have been formally withdrawn as inconsistent "with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority." The retractions include proposed rulemakings on:

• Human capital management disclosures;
• Corporate board diversity metrics;
• Incentive-based compensation arrangements; and
• Cybersecurity risk management.

While the new agenda reflects Chairman Atkins' goals of increasing transparency and simplifying disclosure obligations, the Commission seems poised to recalibrate its rulemaking, not retreat from it entirely: still active, but with a focus on practical efficiency and reduced compliance burdens where possible. For issuers, the agenda suggests opportunity to engage meaningfully in the public comment process, especially in areas like compensation disclosure and digital asset regulation, where proposed rules remain in their early stages.

SEC Names New Head of Corporation Finance

On September 10, 2025, the SEC tapped James Moloney as the new Director of the agency's Division of Corporation Finance. Moloney, a highly respected and longtime legal counsel to several global public companies, previously served at the SEC as an attorney-advisor and special counsel in the Officer of Mergers & Acquisitions. Cicely LaMothe, who has been serving as the Acting Director of the Division of Corporation Finance since early 2025, will return to her previous role as Deputy Director of the Division.

The Division of Corporation Finance is responsible for ensuring investors are adequately informed to make investment and voting decisions. As part of that charge, the Division regularly reviews IPO filings, merger disclosures, proxy solicitations, and other periodic disclosures.

SEC Chairman Paul Atkins praised Moloney's knowledge of corporate governance and disclosure issues and noted his desire to work with Moloney to "modernize and improve" existing rules and "alleviate disclosure burdens." The leadership changes comes as the SEC shifts its regulatory approach under the second Trump administration—one that has prioritized capital formation and streamlined enforcement actions.

Executive Security as a "Perk" Under Scrutiny

As discussed in last quarter's Snapshot, on June 26, 2025 the SEC convened a roundtable discussion on possible updates to executive compensation reporting obligations. To date, more than 65 public comments to the roundtable have been submitted—many of which feature a common theme: whether security measures and related expenses for executives should continue to be disclosed as perquisites.

Under Item 402 of Regulation S-K, issuers must disclose detailed information about their executive compensation practices in registration statements, periodic reports, and proxy statements. Executive security arrangements that qualify as compensatory perquisites or "perks", such as private aircraft travel, must be publicly disclosed. However, business groups and executives alike have challenged this categorization: they argue that that rule—unchanged since 2006—is misaligned with the dangers top executives now face. Commenters emphasize that in an environment where executive security is less a luxury and more a necessity, mandatory disclosure of these costs can create both practical and reputational risks.

Specifically, some issuers worry that disclosing security expenses as perks may inadvertently provide valuable information to potential assailants while others contend flagging such expenses invites unnecessary scrutiny from investors and the media. Indeed, one comment letter noted the availability of information about public company leadership and their families online, with another pointing to the incongruity of treating personal security at an executive's home as a perk.

Although some investor advocates defend disclosure on transparency and shareholder oversight grounds, members of the business community have urged the SEC to eliminate the disclosure requirement, or, at a minimum, raise the $10,000 threshold at which perks must be disclosed so as to avoid disclosure of perquisites that are "immaterial" to investors.

The SEC has not yet signaled a definitive change; however, the growing chorus of comment letters and public advocacy suggests the Commission may soon revisit the rules. For now, issuers should continue to adhere to the existing disclosure framework but consider how they justify security expenses as directly job-related rather than discretionary perks.

Updates to the Financial Reporting Manual

On August 28, 2025, the SEC's Division of Corporation Finance announced several updates to its Financial Reporting Manual, including:

• Real estate related and miscellaneous revisions from 2020 amendments to the Regulation S-X Acquisition Rules;
• Revisions for amendments to MD&A;
• Updates for removal of the five-year selected financial data disclosure;
• Updates for changes to the quarterly supplementary financial information disclosure; and
• Revisions for changes to PCAOB standards and other clarifications related to independent accountants' involvement.

While the Financial Reporting Manual is not binding authority, it is a widely used resource for registrants preparing SEC filings, and changes to the Manual often foreshadow the staff's interpretive posture. The updates serve as a reminder for issuers to revisit disclosure controls and ensure compliance with the amended Regulation S-X Acquisition Rules ahead of any potential acquisitions or divestitures.

Nasdaq Seeks SEC Approval To Trade Tokenized Securities

On September 8, 2025, Nasdaq submitted a proposal to the SEC to approve a rule change that would allow the exchange to list and trade tokenized versions of stocks in an effort to "support the evolution of the markets." Nasdaq formally requested the SEC amend existing rules, including the definition of a security, to permit tokenized stocks to be traded under the same execution and documentation requirements as traditional equities.

Under the proposal, member firms and investors would be able to choose whether their trades clear and settle in traditional form or as tokenized securities via the Depository Trust & Clearing Corporation. The tokenized shares would carry the same order entry and execution rules, have the same identification numbers, and grant the same rights and benefits as conventional shares, Nasdaq says—thus preserving investor protections and ensuring legal and operational equivalence.

Nasdaq President Tal Cohen noted the goal is to capture the efficiencies and transparency of tokenization without compromising market stability or investor safeguards. Nasdaq also indicates its SEC filing will be published for public comment and looks forward to "hearing different perspectives in response."

The development comes at a moment of heightened regulatory interest in bringing digital-asset technologies under SEC oversight. SEC Chair Atkins has directed the agency to develop clear guidance on when digital assets qualifies as securities and the SEC and U.S. Commodities Futures Trading Commission announced an upcoming roundtable on September 29, 2025.

SEC Fee Rates Head Downward

On August 25, 2025, the SEC announced welcome news for issuers beginning this fall: as of October 1, 2025, the SEC will lower its fee rates for securities registration and certain other transactions to $138.10 per million dollars – a decrease of nearly 10% from the current fee of $153.10 per million dollars. The reduction reverses a recent trend of steady fee increases, including a nearly 34% jump two years ago in fiscal 2024. The new fee rate applies to the registration of securities under Section 6(b) of the Securities Act of 1933, the repurchase of securities under Section 13(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), and proxy solicitations and specified tender offers under Section 14(g) of the Exchange Act.

In its order announcing the fee decrease, the SEC explained the reduction reflected an estimated aggregate maximum offering price of roughly $6.4 trillion in fiscal 2026—an increase of more than $780 billion from fiscal 2025. Each year, the SEC sets fee rates to levels the Commission projects will generate collections equal to annual statutory target amounts, which are determined in consultation with the Congressional Budget Office and the Office of Management and Budget. For fiscal 2026, the SEC determined the inflation-adjusted target to be approximately $887.8 million.

In practice, the reduction offers relief to issuers planning both capital raises and/or proxy solicitations, and moreover reflects a broader sensitivity to transactional costs under the new SEC regime.

SEC Shifts Policy Regarding Mandatory Arbitration Provisions

On Wednesday, September 17, 2025, the SEC issued a major policy reversal with respect to the use of mandatory arbitration provisions by companies seeking to go public. As part of Chairman Atkins' push to "make IPOs great again," the SEC announced it would no longer block stock market listings for issuers whose bylaws or charters require investors to settle disputes through arbitration rather than court litigation.

In addition to the policy shift regarding mandatory arbitration clauses, the SEC also voted to prevent a single commissioner or third party from unilaterally stalling an IPO by forcing full Commission review of a registration statement.

Atkins framed the move as a long-overdue correction, noting that for decades the SEC's unwritten practice of slow-walking registration statements for issuers with arbitration provisions had "effectively strangled" the initial public offering process. Commissioner Caroline Crenshaw—the lone Democratic-appointee on the commission—issued a sharp dissent, warning the SEC's new directive "opens the floodgates" to mandatory arbitration and forces shareholders out of the courthouse while allowing companies to conceal alleged misconduct. Arbitration, she argued, lacks transparency, offers few procedural safeguards, and often leaves small investors without a meaningful path to recovery. Crenshaw also criticized the Commission's use of a policy statement rather than the formal rulemaking process, faulting the majority for sidestepping the public notice and comment process on an issue with sweeping implications for investor protection.

However, Commissioner Hester Peirce—in a statement supporting the new policy—argued investors can still choose whether to support companies with arbitration provisions and that the policy merely prevents the SEC from "putting its thumb on the scale" on the debate over such clauses.

For issuers, the SEC's new stance removes a long-standing informal barrier to public registration, but it does not altogether remove the complexity of including arbitration provisions in governance documents. Companies considering such clauses must still navigate state corporate law restrictions, weigh investor and proxy advisor reactions, and carefully tailor disclosures to withstand heightened scrutiny. Even for those not pursuing arbitration, the policy change may prompt shareholder proposals and force boards to articulate their stance, underscoring that the debate over arbitration is likely to play out in the marketplace as much as in the Commission.

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