Recent SEC Administration Changes
SEC Announces George Botic to Serve as Acting Chair of the PCAOB
The Securities and Exchange Commission (the “SEC”) announced on July 21, 2025, that George Botic was designated to serve as the Acting Chair of the Public Company Accounting Oversight Board (“PCAOB”), effective July 23, 2025. Mr. Botic is a Certified Public Accountant and became a PCAOB Board Member in October of 2023. Prior to joining the PCAOB Board, he served as the Director of the PCAOB’s Division of Registration and Inspections. Former PCAOB Chair Erica Williams resigned from the PCAOB’s Board, effective July 22, 2025.
SEC Names Judge Margaret Ryan as Director of the Division of Enforcement
The SEC announced on August 21, 2025, that Judge Margaret Ryan has been named Director of the Division of Enforcement. The appointment became effective on September 2, 2025, and Acting Director Sam Waldon returned to his previous position as Chief Counsel for the Division of Enforcement. Judge Ryan has served in a variety of roles throughout her career, including serving as an active-duty U.S. Marine Corps officer, with two deployments; a judge advocate in the U.S. Marine Corps; a partner at two different law firms; and a law clerk to both Supreme Court of the United States Justice Clarence Thomas and Judge J. Michael Luttig of the United States Court of Appeals for the Fourth Circuit. Most recently, she served as a senior judge of the United States Court of Appeals for the Armed Forces from 2006 through 2020 and has since been a lecturer at Harvard Law School and The George Washington University Law School, as well as a visiting professor at Notre Dame Law School. Judge Ryan obtained her B.A. from Knox College and her J.D. from the University of Notre Dame Law School.
James Moloney Named Director of Division of Corporation Finance
The SEC announced on September 10, 2025, that James Moloney was named Director of the SEC’s Division of Corporation Finance. Cicely LaMothe, who was serving as Acting Director, will return to her previous role as Deputy Director of the Division. From 1994 to 2000, Mr. Moloney was an attorney-advisor and special counsel in the Office of Mergers & Acquisitions in the Division of Corporation Finance where he was the primary author of the proposing and adopting releases for Regulation M-A. Since 2000, Mr. Moloney has been at Gibson Dunn & Crutcher, where he worked his way from a corporate associate to an equity partner, serving as the longstanding co-chair of the firm’s securities regulation and corporate governance practice. Mr. Moloney obtained his B.S. in business administration from Boston University, his J.D. from Pepperdine University, and his LL.M. degree in securities regulation from Georgetown University Law Center.
Jon Kroeper Named Deputy Director of the Division of Trading and Markets
The SEC, on September 24, 2025, named Jon Kroeper as deputy director of the Division of Trading and Markets, effective September 29, 2025. Mr. Kroeper previously spent eight years (1994-2000; 2005-2007) working as an attorney-advisor, senior counsel, and counselor to a Commissioner and a counsel to the SEC Chairman, advising on rulemaking, enforcement, and policy matters before the SEC with an emphasis on market structure, exchange, and broker-dealers. From 2007 until 2024, Mr. Kroeper was an executive vice president at the Financial Industry Regulatory Authority (“FINRA”) in the market regulation department. Mr. Kroeper received his J.D. from the Chicago-Kent College of Law and his B.A. in government from Georgetown University.
SEC Announces Departure of Chief Operating Officer
The SEC announced that Ken Johnson, who had served as Chief Operating Officer (“COO”) since December 2017, will retire from the agency in December 2025. As COO, Mr. Johnson has overseen the SEC’s operational and administrative functions, including the agency’s Office of Human Resources, Office of Acquisitions, and Office of Financial Management. Mr. Johnson also served as the SEC’s chief financial officer from 2010 to 2017 and as a management analyst and chief management analyst between 2003 and 2010.
SEC Rulemaking
SEC Permits In-Kind Creations and Redemptions for Crypto ETPs
The SEC voted on July 29, 2025, to approve orders to permit in-kind creations and redemptions by authorized participants for crypto asset exchange-traded product (“ETP”) shares. The approval orders reflected a departure from recently approved spot bitcoin and ether ETPs, which were limited to creations and redemptions on an in-cash basis. The approval orders allow all bitcoin and ether ETPs to create and redeem shares on an in-kind basis, consistent with commodity-based ETPs.
“It’s a new day at the SEC, and a key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,” said SEC Chairman Paul S. Atkins. “I am pleased the Commission approved these orders permitting in-kind creations and redemptions for a host of crypto asset ETPs. Investors will benefit from these approvals, as they will make these products less costly and more efficient.”
Division of Corporation Finance Issues Staff Statement on Certain Liquid Staking Activities
The SEC’s Division of Corporation Finance issued a staff statement clarifying that, under specified conditions, “liquid staking” arrangements—whereby crypto asset holders deposit their tokens with a protocol or third-party service provider and receive one-for-one “Staking Receipt Tokens” that evidence continued ownership and accrued rewards—generally do not involve an “offer or sale of securities” under Section 2(a)(1) of the Securities Act of 1933, as amended (the “Securities Act”) or Section 3(a)(10) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Applying the Howey analysis, the Division concluded that the limited, administrative or ministerial role of Liquid Staking Providers—who simply facilitate staking, hold the assets in a wallet or smart contract, and may deduct a fee—does not constitute the “entrepreneurial or managerial efforts of others” required to create an investment contract, and the Staking Receipt Tokens themselves function merely as receipts for the underlying non-security crypto assets. Accordingly, neither the minting, issuance, nor redemption of these tokens, nor related secondary-market transactions, require Securities Act registration—unless the underlying crypto asset is itself part of, or offered in connection with, an investment contract. The full statement and discussion can be read here.
Staff Issues FAQs to Help Broker-Dealers Implement Financial Responsibility Requirements Related to U.S. Treasury Clearing
The SEC’s Division of Trading and Markets, on August 6, 2025, issued answers to Frequently Asked Questions (“FAQs”) that broker-dealers have posed to the staff regarding amendments to Rule 15c3-3 under the Exchange Act (the customer protection rule). The FAQs include topics ranging from the use of customers’ securities to meet margin requirements, excess margin collateral, and mark-to-market or variation margin payments.
President Donald Trump Signs Executive Order to Facilitate Retirement Plans Access to Alternative Investments
President Donald Trump signed an Executive Order (“EO”) on August 7, 2025, directing the U.S. Department of Labor (“DOL”) and the SEC to take action to review regulations and guidance to make it easier for retirement plans to invest in a wider range of “alternative assets.” The EO defines alternative assets to include private equity, real estate, commodities, and actively managed investment vehicles that are investing in digital assets. The EO tasks the DOL with re-examining guidance on alternative assets in 401(k) and other defined-contribution plans and the fiduciary duties involved with offering asset allocation funds that contain alternative investments, as well as instructs the SEC to consider ways to facilitate access to investments in alternative assets by participants in participant-directed defined-contribution retirement savings plans, within 180 days of the EO.
SEC Staff Issues Guidance on Registered Closed-End Funds’ Investments in Private Funds
The SEC staff in the Disclosure Review and Accounting Office of the Division of Investment Management published an Accounting Disclosure Information document (the “ADI”) on August 15, 2025. The ADI states that the staff of the Division of Investment Management will no longer provide comments requesting that a fund either (i) include accredited investor status and minimum investment requirements or (ii) limit its private fund investments to 15 percent of assets. According to the ADI, these changes reflect the evolution of both registered funds, private fund advisers, and the rules and regulations governing both since 2002 when the registration statement for the first registered closed-end fund that invested in private funds was approved. Furthermore, the ADI states that any closed-end fund currently operating and that has invested (or seeks to invest) over 15 percent of its assets in private funds and has removed, or seeks to remove, accredited investor and/or investment minimum shareholder limitations from its registration statement should (i) file an amendment to its registration statement through rule 486(a)-(b) under the Securities Act or (ii) file prospectus supplement updates through rule 424 under the Securities Act, as appropriate. Such funds should consider whether the cumulative changes incorporated in those amendments and updates (including any changes in addition to removing the accredited investor and investment minimum shareholder limitations) are material, which would require the staff’s review under rule 486(a).
Further, the SEC staff indicates that registrants that currently limit private fund exposure to 15 percent of assets and never imposed accredited investor and/or investment minimum shareholder limitations in their registration statements and now seek to remove the 15 percent limitation should reflect such changes through a post‑effective amendment filing under rule 486(a), as such a change is material and should be reviewed by staff. The ADI further states that the Division encourages registrants to engage with the staff to determine what filings and disclosures are appropriate for closed‑end funds that invest in private funds. The full ADI is available on the SEC’s website, here.
SEC and CFTC Staff Issue Joint Statement on Trading of Certain Spot Crypto Asset Products
The SEC and Commodity Futures Trading Commission (“CFTC”) issued a joint statement, on September 2, 2025, clarifying their view that SEC- and CFTC-registered exchanges are not prohibited from facilitating the trading of certain spot commodity products. The SEC’s Division of Trading and Markets and the CFTC’s Division of Market Oversight and Division of Clearing and Risk are coordinating efforts to facilitate the trading of certain spot crypto asset products on registered exchanges.
“Today’s joint staff statement represents a significant step forward in bringing innovation in the crypto asset markets back to America,” said SEC Chairman Paul Atkins. “Market participants should have the freedom to choose where they trade spot crypto assets. The SEC is committed to working with the CFTC to ensure that our regulatory frameworks support innovation and competition in these rapidly evolving markets.”
SEC Approves Generic Listing Standards for Commodity-Based Trust Shares
The SEC voted to approve proposed rule changes by three national securities exchanges to adopt generic listing standards for exchange-traded products that hold spot commodities, including digital assets. The approval, announced on September 17, 2025, allows exchanges to list and trade Commodity-Based Trust Shares that meet the requirements of the generic listing standards without first submitting a proposed rule change to the SEC pursuant to Section 19(b) of the Exchange Act. Furthermore, the SEC approved the listing and trading of the Grayscale Digital Large Cap Fund, which holds spot digital assets based on the CoinDesk 5 Index, and the listing and trading of p.m.-settled options on the Cboe Bitcoin U.S. ETF Index and the Mini-Cboe Bitcoin U.S. ETF Index. The SEC’s order approving the standards can be found here.
SEC and CFTC Extend Form PF Compliance Date to October 1, 2026
The SEC announced on September 17, 2025, that it and the CFTC each voted to further extend the date for investment advisers to comply with amendments to Form PF, the confidential reporting form used by certain private fund advisers. The SEC extended the compliance date to October 1, 2026. The Form PF amendments were originally adopted in February 2024 with an original compliance date of March 12, 2025. This is the third time that the compliance date has been extended. For a discussion of the Form PF amendments, please see our past Regulatory Update discussing the topic here.
SEC Issues Policy Statement Clarifying that Mandatory Arbitration Provisions Will Not Affect Effectiveness of Registration Statements
The SEC published a policy statement on September 17, 2025, which announced that decisions about whether to accelerate the effectiveness of a registration statement will not be affected by the presence of a provision requiring arbitration of investor claims arising under the federal securities laws. The policy statement announces that the SEC does not view these provisions as inconsistent with the federal securities laws and thus, the presence of such a provision alone, will not be determinative as to whether to accelerate effectiveness of a registration statement. The full policy statement can be found here.
SEC Seeks Public Comment to Improve Rules on Residential Mortgage-Backed Securities and Asset-Backed Securities
The SEC published a concept release on September 26, 2025, soliciting public comments on how to improve the SEC’s current rules governing residential mortgage-backed securities (“RMBS”) and certain aspects of asset-backed securities (“ABS”) (the “Concept Release”). Although there have been no public RMBS offerings since 2013, the Concept Release seeks feedback on whether certain disclosure requirements should be revised and how to share certain sensitive mortgage information with investors in light of privacy and confidentiality concerns. The Concept Release also seeks comments on whether certain regulatory definitions should be revised and whether revisions to any other ABS regulations should be considered to facilitate access to the public market. The Concept Release can be found here.
SEC Enforcement Actions and Other Cases
11th Circuit Overturns Funding Model for SEC Database
The United States Court of Appeals for the Eleventh Circuit vacated a 2023 SEC order on July 25, 2025, that created a new funding plan for the Consolidated Audit Trail, a centralized database the SEC created in 2012 to track trading on securities markets. The new funding plan would have required broker-dealers to provide two-thirds of the cost for the build-out and continued maintenance of the database and the SEC and other self-regulatory organizations running the site would pay the remaining third. The Court noted that it is possible for these self-regulatory agencies to pass through their fees to the broker-dealer members. The Court determined that the SEC had not considered the potential pass through to broker-dealers and, as a result, the order was unreasonable.
5th Circuit Rules Against SEC’s Short-Selling Rules
The United States Court of Appeals for the Fifth Circuit issued an opinion on August 25, 2025, remanding a pair of rules aimed at bolstering transparency in the short-selling market, ruling that the SEC had failed to consider the economic impact of adopting both rules at once. Rule 13f-2 and the amendment to the National Market System Plan governing the consolidated audit trail were originally adopted on October 13, 2023. For a discussion of the rules, please see our Regulatory Update, here. The Fifth Circuit held that because the rules were related, the SEC should have considered the combined costs of complying with both, and remanded the rules to the SEC to allow the agency to consider and quantify the cumulative economic impact of the rules.
Shareholder Files Class Action Lawsuit Over Fund Accounting Practices
A shareholder (the “Shareholder”) filed a class action lawsuit in Delaware Court on behalf of investors in nine mutual funds (the “Funds”) against the trust of which the Funds are series, their investment adviser and other related parties, as well as the Funds’ independent directors. According to the complaint, the suit was brought to recover for losses associated with alleged false and misleading statements and material omissions in registration statements and prospectuses related to (i) accounting practices and treatment of accrued dividend income and capital gains from underlying fund portfolio holdings; (ii) inflated net asset value (“NAV”) calculations resulting from such accounting practices; and (iii) failures to disclose the risks of such accounting practices. The plaintiff alleges that the Funds’ NAVs were inflated by adding in dividends and capital gains before they were distributed, which would cause investors to overpay for shares and face higher tax liabilities. Furthermore, the complaint alleges that the independent directors of the Funds signed misleading accounting statements. The Shareholder’s law firm filed a nearly identical suit against another mutual fund complex and its independent directors in New York Supreme Court. On October 2, 2025, the Shareholder dropped the independent directors and multiple of the Firm’s officers from its complaint.
Federal Court Enters $0 Judgment Against Airline Company in ESG Suit
Earlier this year, a Texas judge issued a finding of fact and conclusion of law that an international airline company (the “Defendant”) violated federal benefits law by emphasizing environmental, social, and governance factors (“ESG”) in its 401(k) plan decisions. A discussion of this initial ruling can be found in our Regulatory Update, here. On September 30, 2025, the court issued a final judgment (the “Judgment”) that the plaintiff failed to meet their burden of proof establishing a causal link between the Defendant’s breach and actual economic loss. The Judgment, however, imposes equitable relief in the form of a series of new plan policies including a ban on proxy voting and shareholder proposals motivated by non-pecuniary ends, and the appointment of two independent members to the plan’s benefits committee.
Other Industry Highlights
SEC Chairman Atkins Launched ‘Project Crypto’ to Overhaul Policy
SEC Chairman Paul Atkins (the “Chairman”) said on July 31, 2025, that he has tasked staff members across the agency to craft rules and exemptions for digital assets. The Chairman said that the commission-wide initiative directs the agency’s policy divisions to quickly develop clear guidelines that market participants can use to determine whether a crypto asset is a security or is subject to an investment contract. The Chairman stated that he envisions a framework that allows crypto assets that are not securities to trade alongside crypto securities on SEC-regulated platforms. The Chairman noted that another key priority for the SEC staff would be addressing how best to adapt existing rules for the safekeeping of tokens, including potential exemptive relief. The SEC has already begun developing rules and guidelines, including those that we discussed above in “SEC and CFTC Staff Issue Joint Statement on Trading of Certain Spot Crypto Asset Products” and “SEC Approves Generic Listing Standards for Commodity-Based Trust Shares.”
Project Crypto is not operating in isolation. Rather, the President’s Working Group on Digital Asset Markets recently released a report with recommendations to help the United States maintain its position in crypto asset markets. The SEC’s Crypto Task Force, led by Commissioner Hester Peirce, has been traveling around the country and meeting with industry experts and stakeholders concerning policies and regulations that will best allow digital asset development to flourish. Project Crypto will work closely with the Crypto Task Force to understand the needs of the industry and to develop proposed rules consistent with the goals of the President’s Working Group.
SEC Creates Artificial Intelligence Task Force
The SEC announced the launch of a task force on artificial intelligence (“AI”) that will lead the SEC’s efforts to enhance innovation in operations. Valerie Szczepanik, who has been named the SEC’s Chief AI Officer, is leading the task force. Ms. Szczepanik previously was director of the SEC’s Strategic Hub for Innovation and Financial Technology and was the senior advisor for Digital Assets and Innovation and an associate director in the SEC’s Division of Corporation Finance. Ms. Szczepanik received her J.D. from Georgetown University and her B.S. in Engineering from the University of Pennsylvania.
SEC’s Office of Information and Regulatory Affairs Releases Its Spring 2025 Regulatory Agenda
The SEC’s Office of Information and Regulatory Affairs announced on September 4, 2025, its Spring 2025 Regulatory Agenda, which includes three rules in the pre-rule stage, eighteen rules in the proposed-rule stage, and two rules in the final-rule stage. The agenda is highlighted by potential proposed rules on instituting a crypto asset framework, amendments to Rule 17a-7 under the 1940 Act, and amendments to the custody rules. Notably, there are only four items held over from the SEC’s agenda under former SEC Chair Gary Gensler. One of those items, related to transfer agents, has a new description. Previously, the SEC was considering whether to update and refine transfer agent oversight. Under Chairman Atkins, the SEC is now considering updates specifically relating to crypto assets and the use of distributed ledger technology by transfer agents. The SEC is also considering amending rules around custody of advisory client and fund assets, in each case addressing custody of crypto assets. Other agenda items include an examination of the Consolidated Audit Trail, cross-trades exemption, amendment to fund portfolio holding disclosures, and both a crypto market structure and crypto asset regulation. The full Spring 2025 Regulatory Agenda can be accessed here.
Chairman Atkins stated that the new agenda “reflects our withdrawal of a host of items from the last administration that do not align with the goal that regulation should be smart, effective and appropriately tailored within the confines of our statutory authority.”
Department of Labor Announced Spring 2025 Regulatory Agenda, Including Review of Plan Sponsor’s Fiduciary Duties
The Trump Administration announced on September 4, 2025, its Unified Agenda of Regulatory and Deregulatory Actions, which included nearly 150 proposals under the DOL’s jurisdiction. These proposals include a review of fiduciary duties associated with retirement plans. Specifically, the DOL will review the extent to which fiduciaries may consider ESG factors in investment decisions. A final rule is expected in May 2026.
SEC Approves Dual Share Class Structure
The SEC, on September 29, 2025, issued a notice to an investment adviser that it would grant its request to offer and register funds that would have share classes of both mutual funds and ETFs in a single investment vehicle. The approval allows asset managers to add share classes to funds rather than having to prepare, launch, and manage separate versions of products. There are about eighty other investment companies waiting for similar approval of the dual share class structure.
“We see this as a win,” Brian Daly, director of the SEC’s Investment Management Division, said in an interview with Reuters. “We are increasing choice. We are reducing expenses. We are increasing tax efficiency, and we are making the innovation of the ETF – which is now decades old – more accessible to the average retail investor.”
SEC Approves Application for New Dallas-Based Stock Exchange
The Texas Stock Exchange (“TXSE”) reported on September 30, 2025, that the SEC approved its application to launch a new national stock exchange. The Dallas-based exchange has indicated that it will begin trading stocks and exchange-traded products by early 2026. TXSE’s parent company stated that TXSE is the first fully integrated national securities exchange to get SEC approval in decades.