SEC Chair Paul Atkins Testifies on FY2026 Budget, Digital Assets, and Market Integrity

SEC's Core Mission and Budget Request

• 🎯 The SEC's core mission, established over 90 years ago, is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets.
• 💰 The SEC is requesting approximately $2.2 billion in appropriated funding for fiscal year 2026, a level that remains relatively flat compared to previous years.
• ⚖️ The agency aims to balance regulatory costs and benefits, ensuring rules do not unduly burden investors or stifle innovation.

Digital Assets and Regulatory Clarity

• 💡 A key priority is developing a rational regulatory framework for crypto assets, establishing clear rules for issuance, custody, and trading.
• 🚀 The SEC will pursue policy through notice and comment rulemaking, not regulation by enforcement, to provide certainty for innovation.
• 🇺🇸 Concerns were raised that previous administrations' approaches chilled US innovation in digital assets, driving it overseas.

Market Integrity and Corporate Governance

• 🔍 The SEC is examining the role and influence of proxy advisory firms like ISS and Glass Lewis, addressing concerns about potential gamesmanship and abuse in corporate governance.
• 🇪🇺 The agency is concerned about the extraterritorial effect of foreign regulations, such as the EU's CSDDD, on US companies and their supply chains.
• 🏛️ Discussions included the SEC's role in enforcing the Foreign Corrupt Practices Act (FCPA) and ensuring its continued prioritization.

Staffing, Enforcement, and PCAOB

• 📉 Approximately 15% of SEC staff have left voluntarily, impacting divisions like corporate finance and enforcement, though the agency maintains a deep well of competency.
• ⚖️ The SEC is committed to continuing its enforcement of securities laws without fear or favor, regardless of political connections.
• 📈 The testimony addressed the potential folding of the Public Company Accounting Oversight Board (PCAOB) into the SEC, with discussions on funding and maintaining its essential oversight functions.