Republicans are poised to dismantle corporate greenhouse gas emissions reporting requirements and other priorities of President Joe Biden’s Securities and Exchange Commission (SEC), after Donald Trump takes office next year, writes Bloomberg Law.
Trump’s SEC is expected to start undoing the climate rules as soon as January, less than a year after their March release under Democratic Chair Gary Gensler. The regulations have yet to take effect; the agency paused them in April after companies, Republican state attorneys general, and others sued.
A Republican-led SEC also will have the ability to begin work to scrap registration and short-sale rules for hedge funds, as well as other regulations. The National Association of Private Fund Managers and other industry trade groups sued the SEC over the hedge fund rules after the agency issued them under Gensler. The cases are pending.
The process of unraveling SEC regulations, however, can take years. And court battles could be slow to wind down, especially in situations where outside parties like Democratic state attorneys general have intervened to defend SEC rules.
The banking industry is expected to win big as former President Donald Trump returns to the White House, ushering in Republican regulators who are expected to ease capital rules and merger approvals, industry experts and analysts, according to USA Today. The President-elect’s picks are likely to further dilute the contentious Basel III endgame proposal aimed at requiring big lenders to hold more capital to safeguard against soured loans.
While banks have already won major concessions on that proposal which they say will crimp lending and hurt the economy, the latest draft would still increase capital requirements by around 9% for the largest lenders, according to a top Fed official. “The Basel endgame rule could be completely dead,” said Gene Ludwig, a former top bank regulator who advises financial institutions as CEO of Ludwig Advisors, speaking to USA Today.
RIA custodian Altruist COO Mazi Bahadori told Wealth Management that he expects less focus on payment for order flow, how firms safeguard digital assets, changes in equity market trading, broker/dealer interest payments on cash balances, and advisors’ use of [artificial intelligence], all of which would “likely be more favorable to industry participants.”
From a Canadian perspective, easier regulation is the expectation for the new US administration, wrote John Silvia, former chief economist at Wells Fargo and advisor at the Investment Industry Association of Canada. Less barriers to business initiatives and M&A activity will promote stronger economies and financial market valuation.
However, on the side of uncertainty is the matter of tariff, he added. “The new administration is advocating tariffs. To what extent this is the first ploy in a path of negotiations remains to be seen. In my view, Canada is not the first name, nor the second name on the list of trade violators. The focus of the incoming administration is elsewhere,” Silvia wrote.