Written by: Zhao Yuhe, Wall Street Insights.
Informed sources have told the media that Richard Farley, a partner at Kramer Levin Naftalis & Frankel law firm, and Norm Champ, a partner at Kirkland & Ellis law firm, are candidates to succeed Gary Gensler as chair of the U.S. Securities and Exchange Commission (SEC).
Additionally, media reports mention that Robinhood's Chief Legal Officer Dan Gallagher, current SEC Commissioner Mark Uyeda, and former Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert are also among the candidates.
Other sources have told the media that former SEC Commissioner Paul Atkins and Robert Stebbins, a partner at Willkie Farr & Gallagher law firm, are also under consideration. Reuters previously reported that Atkins served in Trump's 2016 transition team and was a strong contender for the SEC chair position that year.
Two informed sources 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 has the highest likelihood of being appointed, but discussions are still ongoing. Trump's press secretary Karoline Leavitt stated, '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 President-elect Trump's transition team and other advisors have begun talks with potential candidates after the election on Tuesday. Discussions are ongoing and it may take weeks to select a candidate.
Whoever it is will relax regulation.
Analysis suggests that regardless of who Trump chooses, the next SEC head may review the major rules established during Gensler's tenure and seek to reduce regulation in the cryptocurrency industry to comply with securities laws.
Gensler was nominated by current President Biden in February 2021 and was sworn in two months later. Gensler's term ends in 2026, but he has stated he will step down when a new Republican administration takes office.
Trump promised during his campaign to promote the development of cryptocurrency and reform the SEC to attract funding from the crypto industry. However, following Gensler's appointment, the industry faced a crackdown, with Gensler claiming it ignored SEC regulations. Reuters previously reported that crypto companies have been pushing for the selection of an SEC chair who can repeal cumbersome regulatory policies.
Many analysts believe Republican SEC Commissioner and cryptocurrency supporter Hester Peirce is a strong candidate for SEC chair, but sources have revealed to the media that she has told some people she does not wish to hold the position.
Although Trump has made few comments on financial policy this time, he has repeatedly promised to cut 'burdensome' regulation. Bankers and lobbyists expect the Trump administration to repeal or significantly weaken the Basel Accord, which requires large banks to increase capital adequacy, as well as reduce restrictions on mergers.
FDIC and the Federal Reserve will also be restructured.
Furthermore, Trump could remove Acting Comptroller of the Currency Michael Hsu from his position on the first day of his administration, but restructuring the top regulatory positions at the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) may take months.
Among those considered by Trump's team for the senior bank regulatory officer candidate list is Federal Reserve Governor Michelle Bowman. She has criticized the capital adequacy increases led by Vice Chair Michael Barr, who is responsible for regulation, and has advocated for the relaxation of banking rules and regulations. Informed sources told the media that Barr has indicated he intends to serve his term as vice chair until it ends in 2026, and it is currently unclear whether Trump will attempt to remove Barr from his position early.
Informed sources also revealed to the media that Travis Hill, Republican vice chairman of the FDIC Board and former Senate Banking Committee lawyer, is also on the list of candidates for senior bank regulatory positions. Hill has also opposed the Basel rules. Additionally, Jonathan Gould, a partner at Jones Day law firm who served as Senior Deputy Comptroller and Chief Legal Advisor from 2018 to 2021, is also being considered.