SEC Scraps 14 Biden-Era Proposals, Signals Regulatory Overhaul
The Securities and Exchange Commission announced the withdrawal of 14 proposed rules and amendments originally introduced between March 2022 and November 2023 during the Biden administration, signaling a broader regulatory shift under new leadership appointed by President Donald Trump.
In a notice issued June 12, the SEC indicated the withdrawn proposals spanned cybersecurity, ESG disclosures, and shareholder rights. The agency noted that if future regulatory action is pursued in these areas, it would issue new proposed rules consistent with the Administrative Procedure Act.
Among the rescinded proposals was a 2022 ESG rule that would have required investment advisors, funds, and other financial institutions to disclose how environmental, social, and governance factors influence their investment strategies.
Other significant withdrawals included: Safeguarding client assets: A proposed revamp of custody rules for investment advisers; Cybersecurity: The rule would have required firms, investment advisors and broker/dealers to enhance cybersecurity defenses and report major incidents; Best execution and order competition: The proposals would have redefined how brokers ensure retail investors get the best deal on trades and how those trades are routed; and Outsourcing by investment advisors: The rule would have prohibited advisors from outsourcing certain services or functions without “conducting due diligence.”
The SEC declined to provide specific reasons for each withdrawal but emphasized that it was no longer pursuing final rules for these proposals. Instead, the agency left the door open to revisit the topics under a new rulemaking process.
Additionally, the SEC announced the appointment of Brian Daly as Director of the Division of Investment Management, effective July 8. He succeeds Acting Director Natasha Vij Greiner, who will depart the agency on July 4.
The regulatory rollback underscores a shift in the SEC’s agenda, as the Trump administration places greater emphasis on deregulation and industry flexibility over the more prescriptive rulemaking approach seen during the Biden era.