Corporate compliance teams face a rapidly changing regulatory landscape as the SEC pivots toward more business-friendly policies. CCI contributing writer Jaclyn Jaeger maps the “sea change” in the commission’s priorities under newly confirmed Chairman Paul Atkins, from its withdrawal of climate disclosure rule defense to the creation of specialized units for digital assets and cybersecurity oversight.
Seismic shifts are reshaping the SEC’s policymaking and enforcement priorities, signaling a broad deregulatory agenda that is expected to drastically alter compliance needs inside regulated entities. This “sea change,” as one securities lawyer called it, will touch everything from scaling back climate-related disclosure requirements to easing crypto asset regulation, while shifting focus away from anti-corruption enforcement. Meanwhile, digital assets and cybersecurity emerge as top areas likely to see more clarified regulatory approaches under new SEC Chairman Paul Atkins.
Confirmed by the Senate in April, Atkins’ priorities diverge significantly from the regulation-by-enforcement approach taken under Gary Gensler, who led the commission from 2021-25.
“Unclear, overly politicized, complicated and burdensome regulations are stifling capital formation, while American investors are flooded with disclosures that do the opposite of helping them understand the true risks of an investment,” Atkins said in the opening statement of his nomination hearing before the Senate Banking Committee.
Before Atkins was formally confirmed, the SEC had begun moving in this direction; in March, the commission voted to end defense of the climate disclosure rules it issued in 2024. Legal and regulatory observers told CCI that compliance professionals should prepare for a more business-friendly environment with an SEC focused on capital formation rather than aggressive enforcement. But as John Mahon, head of the registered funds group at law firm Proskauer, cautioned, even where further rulemaking modifies them, most pending rules eventually will go into effect. This suggests that while the regulatory approach may change, SEC oversight will continue in key areas.
‘At Times of Stress, People Make Stupid Decisions’: Why FCPA Interlude Demands Greater Vigilance
Training and communication remain critical as future of anti-corruption enforcement is murky
Read moreDetailsMeet the new boss
Atkins likely will focus on the capital formation prong of the SEC’s three-part mission, looking to rescind or amend regulations that have an adverse impact on the industry, said K&L Gates partner Lance Dial, a former longtime in-house counsel in the global investment sector. Atkins previously served as an SEC commissioner from 2002 to 2008, appointed by President George W. Bush.
“We can expect chair Atkins to pursue a deregulatory agenda, consistent with the direction of the broader administration,” Dial said.
In his Senate statement, Atkins said that it’s time for the SEC to “reset” its priorities and ensure that regulations are “appropriately tailored within the confines of the regulator’s statutory authority.”
The SEC began making these changes not long after Donald Trump was inaugurated. In a March speech at an investment management conference, then-Acting Chairman Mark Uyeda said that the SEC’s “blueprint” includes ensuring that rulemaking proposals are as “well-reasoned as possible.”
Climate-related risk disclosures
On March 27, the SEC notified the Eighth Circuit Court of Appeals it was withdrawing defense of climate disclosure rules adopted last year, which Uyeda called “costly and unnecessarily intrusive.” The rules require some SEC registrants to disclose climate-related risks that are “reasonably likely” to have a “material impact” on business strategy, operational results or financial condition.
As originally proposed, the rules would have required registrants to disclose Scope 3 greenhouse gas emissions, those occurring within the upstream and downstream activities of their value chains. While the Scope 3 disclosure requirements did not make it into the final rule, the scaled-back version of the rules drew significant pushback, and a wave of litigation followed. The cases were consolidated in the case Iowa v. SEC. The commission had previously issued a stay of the rules’ effectiveness pending completion of that litigation.
This does not mean climate-focused disclosures are going away completely, Mahon said.
“Climate-focused disclosures will likely remain a part of risk-factor disclosures for many public companies, though without the more granular requirements contained in the SEC’s climate-disclosure rules.”
Atkins had previously been critical of the SEC’s climate rules, calling them “troubling” and a “huge departure from precedent and the statutes under which Congress has given SEC authority to require disclosure.”
“If [the SEC] wants to proceed with climate-related disclosures, it should consider a principles-based approach, consistent with securities norms,” Atkins said at a 2022 event.
As a practical matter for compliance and risk professionals, “public companies will need to continue to evaluate their own specific climate-related risks and adjust risk factors accordingly,” Mahon said. “The compliance burden of doing so, though, will be significantly reduced relative to what public companies faced under the SEC’s climate-disclosure rules.”
When SEC registrants include a discussion of material climate-related risks in their public reports, those climate-related risk disclosures “should be more tailored to the actual risks that public companies believe they face,” Mahon said.
Crypto & cybersecurity regulations
In his nomination hearing, Atkins said a top priority of the SEC under his leadership would be to establish a regulatory framework for digital assets. This will likely take the form of selective interpretive guidance or targeted rulemaking in better alignment with non-traditional assets within the SEC’s existing regulatory framework, Mahon said.
In this area, like with climate change, the SEC under Trump made moves with interim leadership before Atkins’ confirmation. The day after Trump’s inauguration, the SEC announced formation of a crypto task force charged with developing a “comprehensive and clear” regulatory framework for crypto assets, saying crypto no longer would be regulated “retroactively and reactively” through enforcement actions and “novel and untested legal interpretations.”
As part of these efforts, SEC staff and the task force are considering alternatives to the safeguarding advisory client assets rule, which the SEC proposed in February 2023. Many commenters had expressed concern with the rule’s scope, which proposes to extend custodial requirements to virtually any asset, including cryptocurrencies. Uyeda said the SEC is considering whether to withdraw the rule altogether.
To complement the work of the crypto task force, a newly formed unit, Cyber and Emerging Technologies Unit (CETU), will focus on tackling misconduct in the following areas:
- Fraud involving blockchain technology and crypto assets.
- Regulated entities’ compliance with cybersecurity rules and regulations.
- Public issuer fraudulent disclosure relating to cybersecurity.
Other Biden-era rules currently being challenged include the cybersecurity disclosure rule. Adopted by the SEC in July 2023, the rule requires companies to make timely reports of material cybersecurity incidents. In a March 31 letter to the SEC, several Republican members of the House Committee on Financial Services are pushing for the cybersecurity disclosure regulations, in addition to others, to be withdrawn.
Meanwhile, the SEC is pulling back on enforcement efforts in other areas. Under Uyeda, the SEC closed inquiries into gaming platform Immutable, blockchain company Yuga Labs and NFT marketplace OpenSea. It also dismissed enforcement actions against Coinbase and Kraken.
Compliance extensions
In recent weeks, the SEC has also extended the compliance deadlines of certain Biden-era rules, including giving investment firms an additional six months to come into compliance with the so-called “Names Rule” under the Investment Company Act.
Adopted in 2001, the Names Rule requires funds to invest at least 80% of the value of their assets in the particular type of investment, industry or geographic region that its name suggests. The 2023 amended rule included fund names that suggest a focus on investments with “particular characteristics.”
On March 14, the SEC issued a final rule extending the compliance deadline for fund groups with net assets of $1 billion or more from Dec. 11, 2025 to June 11, 2026; and the compliance date for fund groups with less than $1 billion in net assets from June 11, 2026 to Dec. 11, 2026.
The SEC stated that the compliance extensions are designed to balance the investor benefit of the amended Names Rule framework with funds’ needs for additional time to “implement the amendments properly, develop and finalize their compliance systems, and test their compliance plans.”
Practically speaking, however, Dial advised compliance professionals not to slow the pace of implementation, as other unanticipated operational issues may need to be addressed along the way.
Looking ahead
Moving forward, even where further rulemaking modifies pending rules, “we still expect most of these pending rules to eventually go into effect,” Mahon said. He encouraged registrants to continue developing compliance processes designed to address pending rules in their present form, “which should allow them to more easily pivot should those rules eventually be modified before final implementation.”
Also, under Atkins, it’s anticipated that the SEC will seek more stakeholder engagement as part of its new rulemaking agenda . Uyeda has criticized the SEC under Biden for its expedited comment periods that did not allow enough time for proper stakeholder engagement.
“Under this administration, the commission’s doors are open, and we are ready to have a productive dialogue,” Uyeda said.
Compliance and risk professionals should take that advice and run with it: Dial encouraged regulated firms to reach out to the SEC staff either directly or through trade associations, as they have a “huge opportunity” under the current administration to effect positive, impactful change in the SEC’s rulemaking structure.
Jaclyn Jaeger is a freelance writer with over 20 years of journalism experience. She began her career in community newspapers before becoming a legal reporter at Lawyers Weekly and later an editor at Compliance Week, establishing her niche covering corporate ethics, regulatory compliance and risk management. She holds a master’s degree from Emerson College. 
