The new chairman of the Securities and Exchange Commission will do the opposite of what was done by the last guy in the job, On The Money has learned.
That was the terse description supplied to me by a top SEC official this week while I was making the rounds at the Milken Institute Global Conference, a one-stop shopping for reporters like me who want to meet power players on Wall Street and Washington.
Wall Street’s new top cop Paul Atkins was recently sworn in by Trump for the very important task of protecting small investors from fraud and making sure markets run efficiently.
He replaces Gary Gensler, who was appointed by President Biden for that basic task – but took the agency in novel directions far afield from its congressional mandate and was decidedly progressive, according to critics.
“We’re going to do the opposite of everything that Gary did,” is how my SEC insider put it. “The agenda will be laid out in the next few weeks.”
Unlike Gensler, who was a banker and academic by trade, Atkins is a securities lawyer and himself a former SEC commissioner during the administration of George W Bush.
He understands the limits and priorities of the office. So don’t expect any wild goose chases during the Atkins years. Lefty pursuits such as Gensler’s mandate that corporations disclose their carbon footprint — about as far afield as you can get from typical investor-oriented disclosures — are dead in their tracks.
No more regulation through enforcement crackdowns on businesses like crypto, a business that the left hated because it represents a diversion from government control.
Unnecessary edicts to change the structure of the stock market that Gensler took on – based on the false notion the markets are biased against small investors (remember trading is virtually free) – will also be a thing of the past.
Atkins could care less that Robinhood — which is one of those brokerages that charge no fees — can sell its “order flow” or buy and sell orders to other companies to match trades. That’s because the system, despite some flaws, generally works well.
So what initiatives will Atkins take on? Look for new and more comprehensive rules on how best to regulate crypto – even if that takes the SEC out of much of the oversight and leaves the industry under the less intrusive focus of the Commodity Futures Trading Commission. I hear Atkins believes the CFTC is better at monitoring most aspects of digital coin business that aren’t traditional securities like stocks or bonds.
Proxy advisory firms faced disclosure mandates during Trump 1 under then-SEC chair Jay Clayton. Expect those rules to make a comeback in some form because these are powerful firms that help guide investors on how to vote on shareholder issues and, the critics allege, they often vote their pocketbooks.
Atkins believes the pathway to being a public company is too burdensome and the regulatory burdens too onerous. It’s why so many companies are choosing not to go public.
He wants more public companies since the number of publicly traded stocks has almost halved since 1996. It is a symptom of a dysfunctional capital formation process of far greater importance than Gensler’s market-structure pursuits.
I’m sure I’m leaving a few things out but one thing is certain: Dramatic change is coming to the SEC.
“As Chairman Atkins said at his White House swearing in, it is a new day at the SEC,” an Atkins rep said in a statement. “It’s time for the agency to return to its core mission that Congress set for it: Investor protection; fair, orderly, and efficient markets; and capital formation.
Credit: Source link
