Potential shifts in U.S. Securities and Exchange Commission (SEC) policies under the administration of incumbent President Donald Trump may roll back progressive measures implemented by President Joe Biden. Central to these expected changes are climate change disclosures, cryptocurrency regulations, and corporate governance.
SEC Climate Rules Face Scrutiny
Under the Biden administration, the SEC introduced rules that required companies to disclose climate-related risks, including their carbon emissions and how they plan to address them. These were part of a broader effort to enhance transparency and align with global sustainability goals.
The Trump administration, however, is expected to reverse these requirements. Its stance on climate change has generally been more skeptical, which could result in a less stringent regulatory framework for companies.
SEC Cryptocurrency Regulations: Biden’s Strict Oversight vs. Trump’s Leniency
Another area of focus is cryptocurrency regulation. President Biden and his staff have taken an aggressive stance on regulating cryptocurrencies, especially to curb illegal activities such as money laundering and to ensure investor protection.
Trump and his team, however, have shown more leniency towards digital assets, reflecting a more favorable approach to innovation in the financial sector. Under Trump’s SEC, it’s likely that the regulatory landscape for cryptocurrencies would shift toward a more laissez-faire attitude, with less emphasis on tight oversight.
Trump vs. Biden: Diverging Views on Corporate Governance and Accountability
The Trump administration is also expected to roll back certain corporate governance reforms that were prioritized during Biden’s years in office, particularly those related to environmental, social, and governance (ESG) factors. These policies required businesses to disclose more information regarding their social and environmental practices, pushing companies toward greater accountability. Trump’s regulatory approach could downplay ESG disclosures, emphasizing shareholder primacy over broader stakeholder interests.
Potential SEC Budget Cuts Under Trump
In addition to policy changes, the new Trump term may also see a reduction of the SEC’s budget. A smaller, less resource-rich SEC could have fewer tools at its disposal for enforcing regulations, particularly in emerging sectors like cryptocurrencies and ESG compliance. It is also possible that the SEC could be restructured, with certain regulatory functions consolidated or shifted to other agencies to streamline operations.
The full article, How Much of Current SEC Policy Will the Trump Administration Reverse?, is available on the CLS Blue Sky Blog.
