SEC Chief Fast Tracks Agenda, Averting Slog Through Rule Changes

SEC Chairman Paul Atkins is pursuing quick fixes to relax corporate reporting and restrict activist investors, with any lasting regulatory rollbacks many months, or even years, away.

The Securities and Exchange Commission under the Trump appointee in July urged a federal court to toss Biden-era climate reporting requirements, in part to avoid the lengthy rulemaking that would be needed to undo them. The SEC in September then advised companies they can funnel investors’ fraud claims into mandatory arbitration, without new rules. Atkins also suggested in a speech this month that companies could block votes on shareholders’ environmental and social proposals now, using existing Delaware law.

All three efforts raise the question of how far Atkins can go to make sweeping changes absent rulemaking. The Republican is working to propose new shareholder resolution and disclosure rules by April 2026, while trying to bring faster relief to companies. The agency included the plans with work to issue proposals on crypto trading, private offerings, and other matters in its spring 2025 rulemaking agenda. But it provided few details on the scope of those proposals.

Atkins has said in recent months that he wants to scrap quarterly reporting requirements, cut back executive compensation and business risk reporting, and have a “fundamental reassessment” of shareholder proposal regulations. The timeline for the various changes is unclear, though Atkins has pledged to fast-track periodic reporting changes, after President Donald Trump pushed for them in September.

The SEC usually takes at least a year to adopt a regulation after the agency proposes it. Timing can vary based on how long the SEC takes to gather public input on a proposal and make any necessary changes. Subsequent lawsuits can keep rules in limbo for years.

Atkins doesn’t need formal updates to ease public company requirements and advance other priorities, if new guidance on existing regulations is sufficient, said Lawrence Cunningham, director of the University of Delaware’s Weinberg Center for Corporate Governance. The SEC chairman also must consider the resources he has available with staff cuts and a government shutdown, Cunningham said.

“He’s got a big toolbox to try to figure out, ‘OK, we’re on this. How can we lean on this agenda optimally?’” Cunningham said.

An SEC spokesperson declined to comment, saying the agency was unable to respond to many inquiries from the press during the ongoing shutdown.

‘New Shortcut’

The SEC’s mandatory arbitration guidance came through a “policy statement,” something the agency has deployed infrequently over the years. The release “does not impose any new rules, regulations, or other requirements on issuers, but could influence issuer behavior,” according to the regulator.

The action from SEC lets companies include clauses in their registration statements that force investors to go through arbitration instead of litigation to resolve securities fraud claims. Investor attorneys have slammed the move.

Agency commissioners voted 3-1 along party lines at a September public meeting to issue the statement. The SEC “decided to hastily construct a new shortcut to its preferred policy destination,” said Democratic Commissioner Caroline Crenshaw, the lone dissenter.

Atkins’ Oct. 9 remarks about curbing investors’ environmental and social proposals came without public vetting by agency commissioners—and while most of SEC employees were furloughed due to the government shutdown that began Oct. 1. The chairman said he had “very high confidence” that the SEC would support company requests to block the shareholder proposals at their annual meetings under Delaware law.

The agency is working to tighten its own rules for investors to file resolutions, but the process “does not happen overnight,” Atkins said.

Rulemaking is unlikely to be judged essential work permitted during a government shutdown, said Sonia Barros, who was on the SEC staff when the agency closed during the first Trump administration. The SEC has only about 400 of its roughly 4,300 employees available to “protect life or property,” according to its shutdown operations plan.

The SEC’s Division of Corporation Finance, which leads corporate disclosure and shareholder proposal rulemaking, had only one person working full time during the December 2018 to January 2019 closure: its then-director, William Hinman.

“There’s very little that they can do,” said Barros, a Sidley Austin LLP partner.

Short-Lived Rules

Even if the SEC adopts new shareholder proposal or corporate disclosure rules, they may not last.

Under Biden-era Chair Gary Gensler, the SEC’s hedge fund fee disclosure and stock buyback rules were tossed in court. Republican attorneys general, business groups, and others also sued to overturn its 2024 climate disclosure rules in litigation that’s still pending. The SEC under Trump abandoned its defense of the climate regulations in the US Court of Appeals for the Eighth Circuit, urging the judges to hear the case without the agency. The court declined to do so.

The new SEC chair has the power to undo rules issued under previous agency leaders, but he still can face lawsuits. The SEC under Gensler had mixed success in reversing proxy advisory firm curbs issued during the first Trump administration, for instance, with courts ruling both for and against the changes.

SEC rules can endure, if they’re created through an apolitical process that protects and enhances market efficiency, said Jill Fisch, a University of Pennsylvania Carey Law School professor, who studies corporate governance and securities regulation. But politically driven rules are less secure, with Republican and Democratic chairs alternately taking aim at them, she said.

“I don’t think that’s the way an independent agency is supposed to or has historically operated,” Fisch said. “I think that’s a broader problem for the market.”