Amy Lynch on how the SEC will shift gears upon Gensler’s departure (Compliance Week)

The exit of SEC Chairman Gary Gensler will usher in a new SEC administration that is likely to throttle down certain current priority areas. Speaking recently with Compliance Week, FrontLine Compliance Founder and President Amy Lynch discussed some of the major changes expected with the SEC’s approach under a Trump administration. She comments that the pace of SEC rulemaking should slow dramatically and expects the Trump administration to reinstitute their prior moratorium on new regulations. Most, if not all, of the 37 rules in their final stages since early 2024 will likely be paused under a Republican majority SEC. An area the SEC may dodge regulating is crypto, states Ms. Lynch, even while Republican SEC Commissioner Hester Peirce has previously advocated for some crypto oversight. She sees the crypto markets flourishing, but also more instances of fraud occurring, leading to criminal prosecutions along the lines of the FTX collapse. Additionally, according to Ms. Lynch, AI will also continue to expand its footprint in the financial industry with little regulatory oversight. Republican leaders have shown interest in reining in Big Tech and while AI-related rulemaking may be absent, it could become a focus area for SEC enforcement. Finally, the pursuit of ESG-related regulations and enforcement cases will most likely not be part of the incoming SEC’s agenda. See Compliance Week (subscription required), “SEC enforcement priorities under Trump: Fewer disclosures, less ESG-focused, more crypto”