Regulatory Forum

The SEC withdrew multiple rule proposals that were previously approved under former Chairman, Gary Gensler, during his tenure, which saw a flurry of rulemaking that was widely criticized as too fast and aggressive. The withdrawn proposals include five that would have directly affected investment advisers and private fund managers, as well as others focused on broker-dealers or public companies. Of the significant rule proposals that Standish Compliance has closely followed for our clients, this leaves only the Customer Identification Program for RIAs and ERAs remaining open.

The SEC further extended the compliance date for amendments to Form PF until October 1, 2025. The Form PF amendments were adopted on February 8, 2024, with a compliance date slated for March 12, 2025. In January 2025, the SEC extended the compliance date to June 12, 2025, resulting in an extra year for annual filers and an extra quarter for large hedge fund quarterly filers to comply. The latest extension came just one day before the compliance date, purportedly to provide more time for filers to program and test for compliance with these amendments. However, Chairman Atkins noted that in addition to the extension, he had directed staff to undertake a comprehensive review of Form PF based on serious concerns about whether the government's use of the data reported in the form justifies the massive burdens it imposes on private fund managers. Assuming the October 1, 2025, compliance date stands, annual filers who submit Form PF in April will still be required to use the new form beginning in April 2026. Large hedge managers who are subject to quarterly Form PF filings will not be required to use the updated form for the Q2 filing that is due on August 29, 2025, but will be required to do so for the Q3 filing that is due on November 29, 2025, and subsequent filings.

In April 2025, the SEC published updates to its Form PF Frequently Asked Questions (FAQ) to address adjustments related to the 2024 amendments, answer new questions raised by the amendments, and withdraw certain FAQs that were no longer relevant after the amendments. The FAQ was further amended in June 2025 following the second extension to clarify timing and the compliance date. Standish Compliance will continue to monitor the status of the amended Form PF. If it moves forward, we will update our Form PF support spreadsheet and our own Form PF FAQ, as needed, which we will share with clients in advance of the submission dates for the new form.

The first quarter of 2025 reflected a number of meaningful changes at the Securities and Exchange Commission (SEC or Commission) with more to come. Former Chairman Gensler departed the agency on January 20 upon President Trump’s inauguration. Trump has nominated Paul Atkins to serve as the next SEC Chairman. Atkins is a former SEC Commissioner who knows the agency well and is expected to be an effective leader. However, his Senate Banking Committee confirmation hearing did not come until very late in the quarter, as it was finally scheduled on March 27. During his hearing, Atkins shared his views on the current regulatory landscape. He noted that the recent regulatory environment stifles capital formation and indicated his desire to pivot from the SEC’s recent emphasis on aggressive enforcement. On April 3rd, the Committee approved his nomination along party lines which will move to the full Senate to vote.

January marked the transition between the priorities of the former Commission to the new Commission, with a few noteworthy enforcement cases pushed through before Chairman Gensler departed. For most of the quarter, the SEC was led by Republic Commissioner, Mark Uyeda, serving as Acting Chairman, Republican Commissioner, Hester Peirce, and a sole Democratic Commissioner, Caroline Crenshaw. In theory, the three-person composition could effectively have veto power over actions requiring a vote of the SEC because Commissioner Crenshaw can deny a quorum for any action she strongly opposes. However, if Atkins is confirmed, the Republican majority would no longer need the Democratic Commissioner, so it will be able to begin with formal rulemaking steps.

No significant rules were proposed or moved forward in the first quarter. Certain compliance dates that were scheduled for key regulatory filings in early 2025 were extended during the quarter. As is typical upon a change in administration, multiple senior staff left the agency in January coinciding with Gensler's departure. President Trump and the Department of Government Efficiency took aim at the SEC, among other federal agencies, resulting in hundreds of other SEC staff departures.

The SEC regularly brings insider trading cases under Section 10(b) of the Securities Exchange Act of 1934 against company officers, directors, employees, or other insiders, as well as gatekeepers, such as investment bankers or lawyers involved in merger and acquisition activities, who have access to and misuse material non-public information (MNPI) received in such capacity, in breach of a duty of confidence. The SEC also regularly charges friends, family members, and individual or professional traders who receive tips from such insiders regarding MNPI and use such MNPI to trade on their own behalf or in funds or accounts that they manage. While SEC enforcement priorities appeared to have shifted significantly during Q1 2025, the SEC nevertheless brought a number of insider trading cases during the quarter as usual. We have summarized some of the perpetrators and facts presented by such cases and reminders for clients.

The SEC hosted an all-day roundtable discussion on artificial intelligence (AI) in the financial industry. The event was hosted in person at the SEC headquarters in D.C. as well as simultaneously virtually, accessible on the SEC’s website’s main page. The roundtable focused on the risks, benefits, and governance of AI in the financial industry. The three Commissioners delivered remarks. The panelists included experts from a wide variety of stakeholders who provided education on developments in AI, possible use cases and AI’s potential benefits and risks. An archive of the AI roundtable webcast can be found at: https://www.sec.gov/newsroom/meetings-events/sec-roundtable-artificial-intelligence-financial-industry

The following is a list of the panels that were presented:

• The Benefits, Costs, and Uses of AI in the Financial Industry
• Fraud, Authentication, and Cybersecurity
• AI Governance and Risk Management
• What’s Next/Future Trends

The SEC voted 2-1 to end its defense of rules that were adopted in March 2024 requiring enhancement and standardization of climate-related disclosures. The prior rulemaking was championed by former Chairman Gary Gensler and Democratic Commissioners, who argued it was necessary to provide investors with the information they need to make informed decisions, while Republican Commissioners dissented, arguing the rule was likely to overwhelm investors. While the decision does not directly relate to the pending rules for investment advisers and investment companies that would require enhanced disclosures about ESG investment practices, it does suggest that these are unlikely to move forward under the current Commission.