The SEC told“ directors across its 10 regional offices that their roles will be eliminated as part of the plan the agency submits next month,” Reuters said.

The moves are part of the broader restructuring plan across regulatory agencies that the Trump administration is implementing to reduce the overall size of government and slash the federal workforce budget. The SEC oversees U. S. capital markets that exceed $ 100 trillion.

While acknowledging that there is almost certainly significant waste to be cut at the securities regulator, two broker-dealer executives privately voiced concerns that dramatic cuts to the agency’ s budget could be imprudent and hurt investor protection.

When former SEC commissioner Paul Atkins was nominated as the agency’ s new chair last December, there were widespread expectations that he would pursue a deregulatory agenda, particularly in the crypto markets. Atkins has yet to be confirmed, and regulatory observers said it was significant that the agency was starting its reorganization before he takes the helm.

Even before the election, there were signs that former President Biden’ s SEC was trying to streamline the agency. Last June, the SEC closed its regional office in Salt Lake City, according to Reuters. The office was considered significant, since serious securities fraud schemes have been conceived in that region.

The Reuters article said other agency leaders have been asked to submit recommendations to reduce regulatory costs. What a restructured SEC will look like remains to be seen. However, the agency has indicated it will curtail crypto enforcement,

“ The regional leadership is what the home office has always looked to for making decisions about enforcement cases and exams. This is a difficult layer to remove.”

— Andrew M. Calamari and it dropped a case against Robinhood’ s crypto business in late February.

Regional directors have frequently played major roles in policy making and investigations of securities law violations.“ The regional leadership is what the home office has always looked to for making decisions about enforcement cases and exams. This is a difficult layer to remove,” Andrew M. Calamari, a partner with Finn Dixon & Herling LLP and former director of the SEC’ s New York office, told Reuters.

Project 2025, an initiative for a second Trump administration to reshape the federal government, has called for the regulatory responsibilities of the Financial Industry Regulatory Authority, the securities industry’ s self-regulator, to be folded into the SEC. Whether the new administration will pursue that idea remains to be seen. Finra is a self-funded organization supported by securities firms, so presumably it could continue to exist even if many of its powers were eliminated. But dealing with a single regulatory agency rather than two might decrease compliance costs for the securities industry.

Experts think it’ s quite possible the administration could be aggressive in the manner through which it restructures the two agencies.“ I’ d be a fool to doubt this administration’ s resolve,” said Brian Hamburger, president and CEO of Market- Counsel Consulting and chief counsel of the Hamburger Law Firm.“ Finra has responsibilities to its members beyond rulemaking and enforcement. So if these responsibilities are absorbed by the SEC, I’ d imagine that the organization would continue to find purpose. However, if membership was no longer compulsory, they’ d have to show value to their members, much like [ the Financial Services Institute ] and [ the Securities Industry and Financial Markets Association ] have to do.”

Finra did not respond to an email request for comment.

— Evan Simonoff

8 | FINANCIAL ADVISOR MAGAZINE | APRIL 2025 WWW. FA-MAG. COM