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New SEC leadership is reshaping the agency’s regulatory priorities, scrapping 14 proposed rules from the prior administration on June 12th, 2025, under Chair Paul Atkins. The mass withdrawal marks a decisive turn toward lighter-touch regulation, aligning with Atkins’ long-standing skepticism of excessive rulemaking. With these rule proposals off the table, the question turns to what lies ahead for the SEC’s regulatory agenda.
Over the past few years, the SEC under former Chair Gary Gensler advanced an ambitious slate of proposed rules, touching everything from climate risk to market structure. Many industry participants, including RIAs, voiced concerns that the agenda was too expansive, and, in the eyes of many firms, overreaching. Few expected these controversial proposals to survive once political winds shifted, and those expectations proved correct.
Although brief in its public explanation, the SEC’s move carries significant weight. The withdrawal effectively resets the rulemaking agenda and sends a clear message that under the new administration, regulation will be more targeted, cost-conscious, and aligned with market realities. For firms that had been bracing for major compliance changes, the shift represents not just a regulatory reprieve, but a broader philosophical course correction.
The 14 withdrawn rule proposals
The fourteen withdrawn proposals spanned a broad range of topics affecting investment advisers, investment companies, broker-dealers, and public markets.
Conflicts of interest associated with the use of predictive data analytics by broker-dealers and investment advisers
This proposal addressed how broker-dealers and investment advisers use artificial intelligence and other predictive data analytics in interactions with investors. It aimed to prevent conflicts of interest and “digital nudging” that could harm clients.
Cybersecurity risk management rule
The rule applied to broker dealers, clearing agencies, major security-based swap participants, the municipal securities rulemaking board, national securities associations, national securities exchanges, security-based swap data repositories, security-based swap dealers, and transfer agents.
It requires a broad range of market participants to adopt written cybersecurity policies, promptly report significant cyber incidents to the SEC, and make public disclosures of material cybersecurity breaches.
Cybersecurity risk management for investment advisers, registered investment companies, and business development companies
A proposal paralleling the above cybersecurity rule. It would have required these firms to implement written cybersecurity programs, conduct risk assessments, report significant cyber incidents to the SEC, and retain related records.
Enhanced disclosures by certain investment advisers and investment companies about environmental, social and governance (ESG) investment practices
This set of rules would have required investment advisers and investment companies to provide detailed disclosures about how they integrate ESG factors into their investment processes and products. The goal was to combat “greenwashing” by standardizing ESG definitions and transparency, so investors know how ESG funds are managed.
Order competition rule
A market-structure proposal that would have required brokers to expose certain retail investor orders to qualified auctions or open competition in the markets before executing the trades internally.
Outsourcing by investment advisers
A proposal to prohibit RIAs from outsourcing critical functions to third-party service providers without performing due diligence and Ongoing monitoring of those provides’ competence and compliance measures. It would have imposed new documentation and reporting requirements whenever advisers delegate key duties.
Position reporting of large security-based swap positions
This proposal, inspired by the Archegos scandal, which would have required investors to file reports with the SEC if they held large positions in security-based swaps above certain thresholds.
Proposed amendments to the national market system plan governing the Consolidated Audit Trail (CAT) to enhance data security:
Targeted enhancements to the data security requirements of the CAT, to better protect sensitive personal information collected in the system.
Regulation ATS / expansion of exchange definition
A proposal that sought to revise Exchange Act Rule 3b-16 and related rules governing ATSs. It would have broadened the definition of “exchange” to include systems using non-firm trading interest and communication protocols to connect buyers and sellers (not just traditional order-matching platforms). This could have potentially brought certain DeFi platforms or other trading communication networks under SEC regulation.
Regulation best execution
This proposed new best-execution standard for broker-dealers would have established an SEC-defined duty of care and oversight framework for brokers to obtain the most favorable terms for customer trades. While broker-dealers are already subject to FINRA’s best execution rule, this proposal would have created a more uniform, Commission-led rule with additional requirements, particularly aimed at retail trading practices and internalized order routing.
Regulation systems compliance and integrity (Reg SCI)
Changes that would have expanded the definition of “SCI entity,” extending Reg SCI’s stringent operational integrity and cybersecurity standards beyond national securities exchanges and clearing agencies to include more trading platforms such as large broker-dealers exceeding certain asset or trading activity thresholds, security-based swap data repositories, and other market participants.
Safeguarding advisory client assets (custody rule overhaul)
A sweeping overhaul of the SEC’s custody rule under the Investment Advisers Act, which would have expanded the rule’s scope beyond securities and funds to include virtually all asset types, including crypto assets.
Substantial implementation, duplication, and resubmissions of shareholder proposals under Exchange Act Rule 14a-8
This proposal would have amended the substantive grounds that public companies may use to exclude shareholder proposals from their proxy statements. Specifically, it would have tightened the “substantial implementation,” “duplication,” and “resubmission” exclusions by requiring that similar proposals not only share objectives but also use the same means to achieve them.
Volume-based exchange transaction pricing for NMS stocks
A proposed market rule that would have prohibited exchanges from offering volume-based discounts on transaction fees for certain agency-related orders in NMS stocks. In practice, the goal was to level the playing field for smaller brokers and investors, by ensuring that high-volume traders don’t get preferential fee rates that others cannot access.
Impacts and industry reactions
Industry leaders and policy advocates who had long criticized Gensler’s regulatory agenda are applauding the SEC’s shift. On Capitol Hill, members of the House Financial Services Committee had urged the SEC to scale back many of these proposals, ultimately hailing the withdrawals as “a meaningful step towards restoring balance” in regulation (House Financial Services Press Release, June 13, 2025). Committee Chairman French Hill further commented that consumers and firms had “faced unnecessary burdens imposed by overreaching federal regulators” and commended the SEC’s move as a win for both investor protection and innovation (House Financial Services Press Release, June 13, 2025). This sentiment echoes the broader industry view that a less aggressive SEC can still safeguard markets without stifling firms with red tape. After all, even without these new rules, advisers remain subject to fiduciary duties and existing regulations, but now with more flexibility in how those obligations are met.
Still, the SEC’s regulatory pullback has not gone without criticism. Investor advocacy groups and some former SEC officials argue that nixing certain proposals, such as the custody and cybersecurity proposals, create gaps in investor safeguards (particularly as crypto-related risks and cyber threats continue to escalate). These critics caution that dialing back regulation should not swing so far that it undermines market integrity. For the moment, however, the prevailing mood in the adviser community is relief, and a sense that the regulatory pendulum has swung back toward the center after a period of aggressive expansion.
For U.S. investment advisers and financial institutions, the SEC’s retreat from these proposals offers both immediate practical and psychological relief. Many RIAs had been preparing sweeping operational adjustments, such as arranging new custodial arrangements for a broader range of assets, enhancing cybersecurity infrastructure, and rewriting ADV disclosures to address ESG. While the rollback lifts the immediate pressure to comply with these potential rules, advisers should not view it as a green light to disregard the underlying risk areas. The SEC’s Divisions of Examinations and Enforcement are still expected to scrutinize many of the core issues that these proposals sought to address.
What’s next? A calibrated approach and new priorities
In the near term, the Commission appears focused on recalibrating its priorities to better align with the new administration’s philosophy, emphasizing a more measured and risk-focused approach. Rather than pursuing expansive, catch-all rule packages, the SEC is expected to target specific, well-justified concerns. In fact, some officials have hinted at revisiting some of the withdrawn topics in a narrower form.
Beyond future rulemaking, Atkins is also reviewing recently finalized rules. In a notable example, the SEC decided to extend the compliance deadline for its new Form PF amendments (which impose greater private fund reporting) and signaled a rethink of those requirements. Atkins justified the delay by questioning “whether the government’s use of this data justifies the massive burdens it imposes” (sec.gov). This signals a broader shift toward reassessing cost-benefit tradeoffs and potentially rolling back rules that do not meet the standard. Under Atkins, this more pragmatic and burden-sensitive approach may become the new norm.
How long this more relaxed regulatory posture will persist remains to be seen, as political shifts and unforeseen market disruptions could quickly alter the landscape. But for now, the SEC’s message to advisers and markets is unmistakable: a pause in expansive rulemaking, a preference for guiding principles over granular mandates, and a renewed focus on achieving investor protections without layering on excessive complexity. For firms, the key will be remaining vigilant and responsive, because if there is one constant in U.S. financial regulation, it’s change.
How Bovill Newgate can help advisers navigate the SEC’s proposed rule changes
In a world of evolving guardrails, we stand ready to help your firm maintain its balance and turn regulatory change into a strategic advantage.
Our team closely monitors these developments to distill what is actionable for your business. With the withdrawal of these rules, we help investment advisers reassess their compliance roadmaps, identifying which planned changes can be deprioritized and which emerging areas still warrant proactive risk management.
Our team of experts are well versed in updating policies and procedures to align with current requirements without over-engineering for rules that won’t materialize, ensuring you remain both compliant and agile.
Get in touch if you’d like to discuss the topics mentioned above in more detail.
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