We believe there may be some misinterpretation in the industry currently. With Paul Atkins heading up the SEC and the recent action to withdraw proposals, some are making some misguided assumptions. We do not believe that the pull back in rulemaking necessarily means we can expect a hands-off regulator.

In a move that underscores a dramatic shift in regulatory direction, the SEC formally withdrew 14 rule proposals on June 12, 2025. These proposals, all introduced between 2020 and 2023, were hallmarks of former Chair Gary Gensler’s ambitious agenda. Their withdrawal reflects a broader recalibration under the leadership of newly appointed Chairman Atkins.

Among the rules rescinded were several that would have significantly affected investment advisers, broker-dealers, and public companies:

• proposed overhaul of the Custody Rule (Safeguarding Advisory Client Assets);
• rules addressing predictive data analytics (AI) conflicts;
• broad cybersecurity risk management frameworks for advisers and market infrastructure entities;
• ESG disclosure requirements for investment firms;
• proposed mandates for outsourcing oversight by investment advisers;
• reforms targeting market structure, swap reporting, and exchange definitions.

This list also includes proposed amendments to Regulation SCI, best execution standards, and security-based swaps oversight—rules that had sparked ongoing debate across industry participants.

Shift in regulatory priorities

Under Gensler’s leadership, the SEC had launched an unprecedented number of rulemakings, aimed at modernizing oversight in response to emerging technologies, evolving markets, and heightened investor scrutiny. However, many of those initiatives faced criticism for their breadth, cost implications, and compressed comment periods.

We do not believe that the pull back in rulemaking necessarily means we can expect a hands-off regulator.

Chairman Atkins, appointed under the Trump administration, has made it clear that his approach will favor regulatory restraint, simplification, and economic justification. This rollback follows a broader government-wide regulatory pause issued earlier in 2025 and reflects alignment with recent recommendations from House Financial Services Committee Republicans, who had specifically targeted these 14 proposals for withdrawal.

Implications for compliance and strategy

For compliance teams and advisers who had been bracing for sweeping operational changes, this development offers relief – but also requires thoughtful recalibration.

While the formal withdrawal of these proposals marks a clear turn away from the Gensler-era agenda, it does not mean these issues are closed for good. The SEC has reserved the right to revisit these topics in future rulemaking, albeit likely in a more targeted, cost-conscious form.

For now, firms should view this as an opportunity to stabilize compliance planning, reallocate resources, and maintain flexibility as the regulatory landscape continues to evolve under new leadership. 

To be clear, we have not seen a slowdown in exams or enforcement. Firms that take this move in rulemaking to mean the SEC is becoming a laissez faire regulator may find themselves with a surprise during their next exam.

Janaya Moscony, President, SEC3. As a former SEC regulator, Janaya has significant experience in the examination, implementation and enforcement of securities regulations. Contact: janaya@sec3compliance.com