With the US election now over, there are a host of outlets out there speculating about what the result means for the world. For our corporate governance and securities space, here are my five quick takes about what the new administration might mean:
- A new SEC chair. A new chair for the SEC will take office sometime next year – and since the SEC chair sets the rulemaking agenda for the agency, all of the pending rulemakings might not be adopted. This Bloomberg Law piece lists some rumored candidates to be the next SEC chair, which includes a few current and former SEC personnel.
- A departure of senior SEC staffers. The directors of SEC divisions likely will turn over within the first six months of the new SEC chair taking office, since those positions typically are filled by the chair. And there likely will be turnover of other senior staffers below that level – particularly if the stock market keeps going up, as experienced staffers will be in high demand if there is plentiful deal flow.
- Recent rulemakings unwound. Rulemakings that the GOP has been fighting may well go under the knife and be removed. For starters, it’s easy to predict that the SEC’s climate disclosure rulemaking won’t need to be complied with – at least for the next four years.
- Changes in staff processes. This one is more of a reach, but this new administration might seek to downsize the federal government, and that could mean a smaller SEC. A smaller SEC would require changes to be made in the staff’s processes and procedures – perhaps fewer rulemakings, fewer filings reviewed, and fewer staff interpretations of rules and regulations.
- Greater reliance on market practice. This is sort of a continuation of the demise of the Chevron doctrine earlier this year – but it’s also related to an SEC that provides less in the way of informal guidance. We might see a rise in groups of law firms putting out white papers to dictate approaches to certain legal issues to gain comfort. Quasi self-regulation. More Wild West.
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