The Push for Deregulation Under the SEC’s New Leadership

As Paul Atkins steps into his role as Chairman of the U.S. Securities and Exchange Commission (SEC), Wall Street is poised for a potential shift in regulatory dynamics. Atkins, known for his deregulatory stance and advocacy of free market ideals, marks a departure from the SEC’s recent trajectory towards more stringent oversight under former SEC chair Gary Gensler. His appointment comes when many in the financial industry are pushing back against rules viewed as overly burdensome, particularly for private funds and alternative investments.

A Return to Free-Market Principles

Atkins’ previous tenure as an SEC Commissioner from 2002-2008 was characterized by a commitment to reducing regulatory burdens and fostering capital market innovation. He frequently advocated for thorough cost-benefit analyses when making rules and argued that regulations should be based on solid evidence and economic reasoning. Atkins opposed regulations he deemed excessive or misaligned with market realities. This is consistent with his remarks at the 12th annual conference on Financial Market Regulation on May 16, 2025, where he reiterated that “high-quality economic analysis is an essential part of any SEC rulemaking,” emphasizing that overregulation can stifle innovation and capital formation.

Some critics, however, argue that such a deregulatory stance contributed to the conditions leading up to the 2008 financial crisis. Atkins has countered that the crisis was more a result of “misregulation” than a lack of oversight, suggesting that the focus should be on smarter, more effective regulation rather than simply more regulation. Given Atkins’ track record, industry groups are now pushing for specific changes.

The Industry’s Regulatory Wishlist

With the SEC now under Atkins’ leadership, industry groups have been quick to act and advocate industry requests for regulatory rollbacks. On March 11, the Managed Funds Association (MFA) submitted a 10-point memo requesting the rollback of several key rules that would ease reporting requirements for hedge funds, which the group claims are operationally burdensome and systemically risky if leaked. The MFA also reiterated its opposition to monthly short sale disclosures, which it argues are duplicative and could lead to predatory trading.

Meanwhile, the Investment Company Institute (ICI) has also advocated for retail investor priorities in a separate request, asking mutual funds to co-invest alongside private funds managed by the same firm and offer expanded product structures, such as hybrid mutual fund/ETF share classes. This reflects the industry’s desire for greater flexibility and access to private markets.

These requests align with Atkins’ philosophy of reducing unnecessary regulatory burdens and promoting capital formation. His leadership is expected to bring a more business-friendly environment, focusing on facilitating investment opportunities while maintaining essential investor protections.

Balancing Innovation and Oversight

While the push for deregulation aims to stimulate economic growth and innovation, it raises concerns about investor protection and market stability. Advocacy groups caution that reducing transparency and oversight could expose investors to higher risks. Atkins has emphasized the importance of tailoring regulations to address actual problems effectively, suggesting a move away from one-size-fits-all rules toward more nuanced approaches.

In particular, Atkins has expressed skepticism toward expansive disclosure requirements related to climate change and environmental, social, and governance (ESG) factors. He argues that such disclosures may overwhelm investors with immaterial information and deviate from the SEC’s core mission of protecting investors and maintaining fair, orderly, and efficient markets. Atkins also believes many of these initiatives exceed the SEC’s mandate and risk politicizing capital markets.

Implications for the PCAOB

The SEC’s leadership shift may also have meaningful implications for the Public Company Accounting Oversight Board (PCAOB), which came under increased scrutiny during Atkins’ earlier tenure. During his prior tenure, Atkins was openly critical of what he viewed as the PCAOB’s growing bureaucracy, lack of accountability, and overly prescriptive audit standards and questioned its expanding role post-Sarbanes-Oxley.

With President Trump’s executive order directing agencies to identify and eliminate costly or unnecessary regulations, and with the DOGE (Department of Government Efficiency) tasked with leading that charge, there is rising speculation that the PCAOB’s authority and scope could be scaled back or restructured.

While the PCAOB is technically overseen by the SEC, Atkins’ deregulatory posture and alignment with the administration’s anti-regulation agenda may lead to more aggressively scrutinizing the board’s activities, particularly around inspection mandates, enforcement, and audit firm oversight. For public company auditors, scaling back the PCAOB would have sweeping consequences. It could change how audit oversight works during a time when finance is getting more complex.

The Bottom Line

Atkins’ leadership is ushering in a critical inflection point for U.S. market regulation. The next phase of the SEC may redefine how investment products are governed, who can access them, and under what terms. For fund managers, allocators, and industry stakeholders, the message is clear that deregulation is back in focus. The challenge will be navigating this new era without compromising the investor protections and market transparency that underpin long-term trust.

Investment managers and allocators must stay closely attuned to regulatory developments as the balance between innovation and oversight enters a new phase of recalibration. In this shifting environment, success will depend on adapting to new rules and expectations and actively advocating for a regulatory framework that fosters economic growth and long-term investor trust.

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