Gary Gensler, the U.S. Securities and Exchange Commission (SEC) Chair, will step down from his role, coinciding with the inauguration of President-elect Donald Trump. Gensler's tenure, which began in April 2021, faced criticism for what some viewed as the SEC overstepping its regulatory boundaries. According to the DI Wire, the President-elect has expressed intentions to replace Gensler. Key accomplishments during Gensler's tenure as reported by DI Wire are:
Treasury Markets
Gensler's SEC updated rules in the $28 trillion U.S. treasury markets. The changes aimed to reduce costs and risks by encouraging central clearing and limiting broker-dealer exemptions from national securities association registration.
Equity Markets
For the first time in nearly 20 years, the SEC introduced significant updates to the $55 trillion U.S. equity market. These included narrowing trading spreads, lowering fees, and reducing the settlement cycle to one day, which decreases market risk. The agency also improved transparency by enhancing broker execution quality disclosures.
Resiliency Efforts
The SEC revised Form PF to require large hedge fund and private equity fund advisers to report certain events promptly. In collaboration with the Commodity Futures Trading Commission, it improved data quality for regulators. Additionally, the SEC reformed money market funds to increase resilience, liquidity, and transparency.
Corporate Governance
The SEC adopted numerous corporate governance changes under Gensler. These covered the timing of insider stock sales, executive compensation clawbacks, and pay-for-performance disclosures. The agency also enhanced shareholder voting rights and introduced stricter disclosure requirements for individuals seeking control over 5% of a company's shares.
Disclosure Reforms
The SEC mandated public companies to report cyber and climate risks, enhanced transparency for special-purpose acquisition companies, and required broker-dealers to notify clients about data breaches. Furthermore, it published anonymized data on registered investment funds, private funds, and investment advisers.
Accounting and Auditing
Gensler's leadership saw increased oversight of foreign auditors, particularly in China and Hong Kong. The Public Company Accounting Oversight Board updated multiple accounting standards that had been unchanged for two decades, reflecting modern oversight needs.
Examinations and Enforcement
The SEC's Enforcement and Examinations divisions handled over 145,000 tips, complaints, and referrals. The SEC awarded $1.5 billion to whistleblowers, conducted more than 2,700 enforcement actions, and secured approximately $21 billion in penalties and disgorgements. These actions returned $2.7 billion to harmed investors.
The examinations division also recovered over $250 million for affected investors. Under Gensler's leadership, the SEC pursued numerous crypto-related cases, addressing fraud, registration violations, and other issues. According to the SEC's Office of the Inspector General, 18 percent of tips, complaints, and referrals in the last fiscal year were crypto-related, despite crypto markets comprising less than 1 percent of U.S. capital markets.
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