SEC Cuts Regional Director Positions, Begins Restructuring
The SEC is eliminating regional director positions across its 10 offices as part of cost-cutting measures recommended by the Trump administration, according to Reuters this week. This move aligns with broader efforts to reduce government size and regulatory costs. While some believe there is waste to cut, industry executives worry that budget reductions could weaken investor protection.
The restructuring precedes the expected confirmation of SEC Chair nominee Paul Atkins, who is anticipated to push a deregulatory agenda, particularly in crypto. The SEC has already scaled back enforcement efforts, including dropping a case against Robinhood’s crypto business.
Additionally, the administration is considering folding FINRA’s regulatory responsibilities into the SEC, a move proposed in Project 2025. While this could streamline oversight and lower compliance costs, it may also increase taxpayer expenses, conflicting with the administration’s cost-cutting goals. Experts anticipate an aggressive restructuring but note that FINRA might continue operating if membership remains voluntary.
FINRA’s Role in Protecting Investors
FINRA (Financial Industry Regulatory Authority) acts as the regulator for the U.S. securities industry, overseeing broker-dealers to protect investors and maintain market integrity. It sets and enforces rules, conducts firm examinations, and handles arbitration and mediation. FINRA ensures that securities professionals are qualified and licensed, advertisements are truthful, and investment products are suitable for investors. It also investigates complaints and takes corrective action against misconduct. FINRA operates under contracts with major exchanges like NASDAQ and the American Stock Exchange, playing a critical role in market regulation.
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Last modified: March 3, 2025
