Author: Zhao Yuhe, Wall Street Insight
Sources familiar with the matter told the media that Richard Farley, a partner at Kramer Levin Naftalis & Frankel, and Norm Champ, a partner at Kirkland & Ellis, are expected to be candidates to replace Gary Gensler as chairman of the U.S. Securities and Exchange Commission (SEC).
There are also reports that Dan Gallagher, chief legal officer of Robinhood, current SEC commissioner Mark Uyeda, and former Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert are also on the list of candidates.
Other sources told the media that former SEC commissioner Paul Atkins and Willkie Farr & Gallagher partner Robert Stebbins are also being considered. According to a previous Reuters report, Atkins had served on Trump's transition team in 2016 and was a strong contender for the SEC chairman position that year.
Two sources familiar with the matter told the media that Robinhood's chief legal officer Gallagher is a popular candidate among cryptocurrency industry executives, who have donated millions of dollars to Trump's Republican campaign. Currently, Gallagher is the most likely to be appointed, but the discussions are still ongoing. Trump's press secretary Karoline Leavitt said in a statement, "President-elect Trump will soon begin deciding who will serve in his second administration. These decisions will be announced when made."
Media reports indicate that members of the incoming President Trump's transition team and other advisors have already begun meeting with potential candidates since the election on Tuesday. The discussions are still ongoing and it may take several weeks to select the candidates.
Whoever it is, they will relax regulations
Analysts believe that whoever Trump chooses, the next SEC chief is likely to review the major rules implemented during Gensler's tenure and seek to reduce regulation in the digital currency industry to align with securities laws.
Gensler was nominated by current President Biden in February 2021 and sworn in two months later. Gensler's term is set to end in 2026, but he has stated that he will step down when the new Republican administration takes office.
Trump had promised during his campaign to promote the development of cryptocurrencies and reform the SEC to attract capital from the crypto industry. However, after taking office, Gensler has taken a tough stance on the industry, saying it has disregarded SEC regulations. Reuters previously reported that crypto companies have been pushing for the selection of an SEC chairman who can abolish burdensome regulatory policies.
Many analysts believe that Republican SEC commissioner and cryptocurrency supporter Hester Peirce is a strong candidate for SEC chairman, but sources have told the media that she has told some people she does not want the position.
Although Trump has not made many comments on financial policy this time, he has repeatedly promised to reduce "burdensome" regulations. Bankers and lobbyists expect the Trump administration to repeal or significantly weaken the Basel Accords' requirements for large banks to hold higher capital ratios, as well as reduce restrictions on mergers and acquisitions.
FDIC and the Federal Reserve will also be reorganized
Additionally, Trump can dismiss Acting Comptroller of the Currency Michael Hsu on his first day in office, but reorganizing the top regulatory positions at the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) board may take several months.
Among the candidates being considered by the Trump team for senior banking regulatory positions is Federal Reserve Governor Michelle Bowman. She has criticized the Federal Reserve's vice chairman for supervision, Michael Barr, for leading the increase in capital requirements, and has advocated for relaxing bank rules and regulations. Sources told the media that Barr has stated he intends to serve out his term as vice chairman until 2026, and it is unclear whether Trump will attempt to remove Barr from office early.
Sources also revealed to the media that Travis Hill, the Republican vice chairman of the FDIC board and former Senate Banking Committee counsel, is also on the list of candidates for senior banking regulatory positions. Hill also opposes the Basel rules. Additionally, Jonathan Gould, a partner at the Jones Day law firm who served as senior deputy comptroller and chief counsel of the Office of the Comptroller of the Currency from 2018 to 2021, is also being considered.
