Our Take Special Edition: The first 100 days of the second Trump Administration

• What happened?
  • The Fed proposed stress testing changes: On April 17^th, the Fed issued a proposal to modify elements of the stress capital buffer (SCB),¹ including averaging stress test results over two years and delaying the effective date of changed SCBs to the following year.
  • Basel III endgame still on hold: Fed Chair Powell said in February Congressional hearings that the Fed is eager to work with new colleagues at the FDIC and OCC to finish Basel III endgame “fairly quickly." However, on April 9^th, Treasury Secretary Scott Bessent signaled a departure from the Basel III endgame standards, saying that the U.S. should “selectively borrow” from them and otherwise determine its own regulatory framework.
  • New agency leads signaled focus on financial risk supervision: In separate remarks and confirmation hearings, incoming Fed Vice Chair for Supervision Michelle Bowman and Comptroller Jonathan Gould each called for supervision to focus more explicitly on core financial risks – such as credit, liquidity, interest rate, and operational risk – and away from subjective governance and management assessments. On April 8^th, Acting FDIC Chairman Travis Hill said the FDIC continues to evaluate adjustments to its supervisory framework, including enhancements to the CAMELS rating system and examiner training.
  • Leverage ratio and liquidity adjustments on deck: In their April speeches, both Bessent and Hill announced that the bank regulators are working on a proposal to ensure that the supplementary leverage ratio (SLR) functions as a backstop. Bessent also noted plans to assess the current liquidity framework, including the role of the discount window and Federal Home Loan Banks, and opportunities to expand which types of loans a bank can pledge as eligible collateral.
• What’s next?
  • If reproposed, Basel III endgame will be pared down: With new leadership at the Fed and FDIC, regulators may reissue a narrower, more tailored version of the proposal or scrap it altogether. Any new proposal would need to align with the Administration’s deregulatory posture and avoid significant increases in capital burdens.
  • SLR reform proposal likely this year: The banking regulators are likely to jointly propose SLR reform by the end of the year, potentially exempting central bank reserves or Treasury securities to ease market constraints.
  • The SCB rule could be finalized by year-end, with more stress testing proposals to come: The Fed’s proposed changes will undergo a 60-day comment period and could be adopted in time for integration into the 2026 planning cycle. Later this year, the Fed will propose further changes to increase transparency around stress testing, including disclosing its models and 2026 scenarios for public comment.

Our take

Long-awaited capital relief is nigh. With the Fed’s proposals to reform stress testing and Bessent’s and Hill’s confirmation that the agencies are working on rulemaking to reform the SLR, banks are poised to receive changes that make their capital requirements more predictable, transparent and aligned with market intermediation activities. But while some rules are being rewritten or withdrawn, expectations around financial resilience remain. Firms should maintain robust internal capital adequacy frameworks, monitor comment period developments closely, and prepare to justify assumptions in stress testing models – especially if the Fed begins publishing those models. Institutions that can demonstrate thoughtful scenario design, risk-aligned buffers, and disciplined capital planning will be best positioned to benefit from the coming shift.

International accords under pressure. Bessent’s comments on the U.S. diverging from the Basel III endgame standards reflect the Administration’s skepticism around the necessity of following international agreements. He sent a new signal that the regulators will not just remove the gold plating (or additional requirements) from the original Basel III endgame proposal; they may exclude aspects of the global standards altogether. Differing standards across jurisdictions are not a new phenomenon but the implications for international supervisory cooperation and for globally active U.S. banks will need to be considered.

Focusing bank ratings on financial risk will spark debate. The regulators’ remarks around reducing focus on non-financial factors and taking a fresh look at the bank ratings framework could have the most rapid and significant impact of all the plans under consideration. No formal rulemaking is required to effect these changes, rather each agency can move forward by updating exam scheduling and staffing, as well as examiner handbooks and training. The reforms are targeted at fundamentally curtailing supervisory discretion in favor of objective financial metrics and statutory requirements. Such changes will spark a debate on the importance of maintaining strong management and governance standards – as well as the potential impact to consumers and other market participants.

¹ Finalized in 2020, the SCB replaced the static 2.5% capital conservation buffer to set a capital requirement that would change based on the latest year’s Fed-modeled stressed capital losses and four quarters of planned dividends.

• What happened?
  • The White House set a course for crypto clarity: The Administration’s new approach to digital assets got off to a quick start with a January 23^rd Executive Order establishing the Presidential Working Group on Digital Asset Markets, which is tasked with developing a “regulatory framework governing digital assets, including stablecoins.”
  • Federal banking agencies reversed prior restrictions on crypto engagement: On March 7^th, the OCC issued Interpretive Letter 1183, rescinding a previous statement that required banks to obtain supervisory non-objection before engaging in digital asset activities. The letter reaffirms that federally chartered banks may provide crypto custody, hold stablecoin reserves, and participate in distributed ledger networks for permissible payment activities. The Fed and FDIC both followed by withdrawing similar guidance requiring pre-approval before engaging in crypto activity. All three agencies have reminded firms to remain responsible for managing risks associated with any new crypto activity.
  • Congress advanced parallel stablecoin legislation: The STABLE Act passed out of the House Financial Services Committee, while the GENIUS Act advanced through the Senate Banking Committee with bipartisan support. Both bills would create a regulatory framework for dollar-backed stablecoins, including 1:1 reserve requirements and supervisory jurisdiction by either the OCC or state regulators, depending on issuer size.
  • The SEC adjusted its crypto policy and enforcement:
    • In late February and March, the SEC dismissed several high-profile enforcement actions, including a case against a major crypto trading platform.
    • On February 27^th, the SEC’s Division of Corporate Finance issued a staff statement clarifying that “meme coins” are not securities and do not require registration under federal securities law.
    • On March 21^st, the SEC’s newly formed Crypto Task Force held its first public roundtable on how digital assets should be defined and treated under securities laws.
    • On April 4^th, the SEC released a policy statement that “covered stablecoins” — those pegged 1:1 to the U.S. dollar, immediately redeemable, and fully reserved — would not be considered securities.
    • On April 10^th, the SEC issued guidance on digital asset securities disclosures, reminding issuers to address risks related to technology, cybersecurity, and legal ambiguity using clear, accessible language.
  • The CFTC reversed policies: On March 28th, the CFTC withdrew two staff advisories, one on virtual currency derivative product listings and another on risks related to clearing digital assets. The agency stated that digital asset products will now be supervised under the same frameworks used for other commodities, reflecting increased familiarity with the market and a shift toward more consistent oversight.
• What’s next?
  • Reconciliation of the GENIUS and STABLE Acts: Congress must resolve differences between the two bills, particularly around the role of state regulators and treatment of nonbank stablecoin issuers. A unified framework is expected to emerge in the coming months, providing long-awaited clarity to market participants.
  • Issuance of a federal digital asset roadmap: The President’s Working Group on Digital Asset Markets, chaired by the White House AI and Crypto Czar, is expected to publish recommendations clarifying agency jurisdiction and establishing risk management standards for crypto custody, payments, and exchange infrastructure.
  • More agency guidance: The OCC, FDIC, and Fed have indicated they will release updated guidance later in 2025 covering liquidity, custody controls, AML, and risk governance for digital asset activities.

Our take

The doors are open but proceed carefully. By permitting banks to engage in crypto activities without seeking prior approval, banks are now encouraged to begin developing and executing crypto strategies and those that have been preparing crypto strategies are now enabled to more quickly unleash them. We expect to see additional regulatory clarity around stablecoins and asset classification (e.g., securities, commodities) in the not-too-distant future, which will further open the doors for additional market participants and crypto activities. However, new products and services come with attendant risks that will be essential for banks to manage to ensure that these innovations develop in a way that protects consumers, promotes safety and soundness, and preserves financial stability. Considerations include:

• Capital and liquidity. Firms should consider the impact of market volatility, concentration risk, and the possibility of large and sudden inflows and outflows on their capital and liquidity programs. As traditional capital and liquidity models may not fully account for the unique risks associated with digital assets, updates to these models, along with stress testing and market surveillance, may be necessary for firms entering the crypto market.
• Anti-money laundering and sanctions evasion. The anonymous nature of many digital asset platforms and transactions can attract illicit actors looking to launder money or evade sanctions. In addition to traditional anti-money laundering best practices, firms should consider whether specialized blockchain transaction monitoring tools, technology to detect the use of mixers and tumblers used to obfuscate transactions, or geolocation tools are necessary to mitigate money laundering and sanctions risks.
• Cybersecurity and fraud. Digital assets increase exposure to hacking, phishing, and private key mismanagement, potentially requiring hiring and/or upskilling staff to address the unique nature of these risks as well as technology enhancements to better prevent and detect illicit activities.
• Third-party risk management. Increased reliance on vendors for custody, trading, and compliance introduces additional risks, such as potential vulnerabilities in smart contracts and blockchain protocols. Firms should consider incorporating these risks into their third-party due diligence and ongoing monitoring programs.

• What happened?
  • Debanking emerged as a top policy concern: Throughout Q1 2025, lawmakers held multiple hearings on alleged political or reputational bias in account closures. These hearings followed document releases by the FDIC showing past supervisory communications instructing banks to “pause” crypto activity, which many lawmakers cited as examples of supervisory overreach.
  • Congress advanced legislation to remove reputational risk from supervision: On March 18^th, the Senate Banking Committee passed the Financial Integrity and Regulation Management (FIRM) Act, which would prohibit agencies from using reputational risk in guidance, ratings, or enforcement actions. The bill would also require agencies to formally report to Congress on the removal of reputational risk considerations. A companion bill was introduced in the House of Representatives on April 9^th.
  • The OCC eliminated reputational risk as a supervisory consideration: On March 20^th, the agency announced that it would remove all references to reputational risk from its handbooks and guidance documents and no longer evaluate it as part of examinations. At his confirmation hearing on March 27^th, Comptroller nominee Jonathan Gould pledged to fight “politically-motivated debanking” while the agency’s Acting Chair Rodney Hood has stated that banks must evaluate customers, including crypto firms, based on individualized risk assessments rather than excluding entire categories of customers.
  • Some in Congress seek to align reputational risk with foreign policy: The House Select Committee on the Chinese Communist Party recently sent letters to certain large U.S. banks expressing concern with providing financial services to a company that the Committee claims is affiliated with the Chinese military.
• What’s next?
  • Other federal agencies are expected to follow the OCC’s lead: The Fed and FDIC are also likely to remove references to reputational risk from joint supervisory guidance, ratings frameworks, and exam manuals.
  • The FIRM Act’s future is uncertain: The FIRM Act is awaiting consideration by the full Senate and the House Financial Services Committee. The bills will need to be reconciled and passed by both chambers to become law.

Our take

Unsupervised but not unnecessary. The formal removal of reputational risk from supervisory materials is a significant pivot in tone and discretion. But banks must still make – and be prepared to defend – hard choices about which clients align with sound risk management practices and their stated values. They need to build and follow documented, risk-based client acceptance frameworks with denials tied to clear factors like AML, legal, operational risk or weak business purpose. However, banks will now have the opportunity to revisit some of the infrastructure built around their reputation risk management programs to focus on strategic considerations rather than supervisory pressures.

Public and political attention on debanking continues. Banks should still expect pressure regarding client selection and other sources of potential reputation risk from the same broad range of stakeholders as ever, even as the nature of that pressure evolves thematically alongside prevailing political sentiment. They must continue to carefully monitor this dynamic to balance headline risk with their broader risk management goals, strategic mission and corporate values.

Future-proofing change. If passed, the FIRM Act would permanently bar agencies from reinstating reputational risk-based supervision absent Congressional action, reducing the likelihood of “regulatory whiplash” if a future administration were to refocus on reputational risk. However, it remains unclear whether the Act will pass a Congress balancing other legislative priorities and whether it can overcome a potential Senate filibuster.

• What happened?
  • The FDIC withdrew its merger policy: On March 3^rd, the FDIC issued a proposal to withdraw its September 2024 bank merger review policy, which introduced a $100 billion asset threshold for heightened scrutiny and required applicants to demonstrate that the merger would “better meet” community needs.
  • Large bank merger approved: On April 18^th, the Fed and the OCC approved Capital One’s acquisition of Discover Financial Services. The approvals were subject to certain governance and compliance conditions.
  • Regulators signaled openness to bank-fintech partnerships: FDIC and OCC leaders have signaled support for fintech partnerships, with Chairman Travis Hill calling for “less supervisory invasiveness” with respect to innovative service models. In his previous tenure at the OCC, Comptroller nominee Jonathan Gould was involved in the issuance of its first fintech bank charter.
  • Regulators emphasized the need to promote de novo bank formation: Bowman and Hill have both acknowledged that the de novo application process has been overly complex and slow, contributing to a decline in new bank formation. They indicated plans to revise capital expectations, clarify approval standards, and modernize how they evaluate fintech-driven charters and community business models.
• What’s next?
  • The deal is set to close: The Capital One – Discover acquisition transaction is expected to close on May 18^th.
  • The FDIC’s proposal to rescind its merger policy will be finalized: Industry participants are expected to support the rollback, and the FDIC Board is expected to approve the policy rescission this year.
  • The OCC and Fed may revise their policies: While neither agency has formally withdrawn their merger frameworks, they will likely follow in the FDIC’s footsteps.

Our take

Doors open to deals. With less supervisory invasiveness, banks will be able to turn their focus to market-based considerations for mergers and partnerships, including strategy, operational efficiencies, and management succession. The FDIC’s proposal to rescind its September 2024 merger policy will reduce uncertainty and remove procedural hurdles that had chilled deal activity, particularly among mid-size banks. Still, streamlined review does not mean lowered expectations. Institutions pursuing mergers or launching de novos should be prepared to demonstrate clear statutory alignment, sound governance, and a sustainable business model. In the case of fintech-driven partnerships or acquisitions, firms should reinforce third-party risk management frameworks and ensure that compliance, operational resilience, and customer outcomes are central to integration plans. Even as process hurdles fall, strategic decision-making must remain rigorous. Boards and executives should continue to weigh long-term value, risk tolerance, and reputational impact – not just regulatory posture – in evaluating growth opportunities. The opportunity is real, but the expectations remain: safety, transparency, and durable value creation.

• What happened?
  • Barr framed AI as a “competitive necessity”: On April 4^th, Fed Governor Michael Barr gave a speech outlining both the promise and risks of generative AI in banking. He highlighted AI’s usefulness in credit underwriting, risk modeling, customer service, and fraud detection while reminding institutions that existing expectations around model risk management and third-party oversight already apply to AI deployments.
  • The OMB issued AI governance guidance for federal agencies: On April 3^rd, the OMB released a memo implementing President Trump’s January executive order on responsible AI adoption. The memo requires agencies – including financial regulators – to appoint Chief AI Officers, publish AI strategies, and implement minimum risk management practices for high-impact AI use cases by 2026.
  • Treasury issued a report on AI-specific cybersecurity risks: On April 25^th, Treasury released a detailed report recommending governance processes for AI oversight, including third-party AI providers. It emphasized explainability, digital identity controls, and risk assessments tied to AI-driven fraud and cyber threats.
• What’s next?
  • Agencies must meet AI governance milestones by Q3: Per the OMB memo, Chief AI Officers must be appointed by June 2^nd and agency AI strategies must be published by September 30^th.

Our take

AI is moving fast and regulators expect firms to keep up. Regulators are sending a clear message: financial institutions don’t need permission to use AI, but they must manage the risks. There’s no AI-specific rulebook yet – and none expected soon – but existing expectations around model governance, operational risk, and third-party oversight already apply. Institutions should treat AI like any other material technology deployment: with defined accountability, documented risk assessments, and board-level visibility.

The adoption of AI by regulators themselves will also raise the bar. As examiners begin using AI to detect anomalies or assess consumer outcomes, firms must be prepared to match that level of sophistication in their own operations. Governance can’t be reactive. Financial institutions should formalize cross-functional AI working groups, align third-party risk management and model risk management frameworks to emerging AI use cases, and ensure that senior management understands both the capabilities and the constraints of AI tools. The future is not wait-and-see – it’s build-and-explain.

• What happened?
  • FinCEN issued a geographic targeting order (GTO) lowering CTR thresholds near the southwest border: On March 11^th, FinCEN issued a GTO requiring money services businesses (MSBs) operating in 30 ZIP codes near the southwest U.S. border to file Currency Transaction Reports (CTRs) for cash transactions exceeding $200. It also encouraged suspicious activity report (SAR) filings for transactions designed to evade the threshold.
  • Congress began considering broader CTR threshold reform: On April 1^st, the House Subcommittee on Illicit Finance held a hearing on the Financial Reporting Threshold Modernization Act, which would raise the CTR threshold from $10,000 to $30,000 and include future inflation adjustments. Although FinCEN has not formally endorsed the bill, there is bipartisan interest in revisiting decades-old reporting requirements.
  • President Trump issued an executive order on outbound investment screening: The order directs agencies to identify and restrict outbound investments involving adversary-linked entities and technologies such as AI, quantum computing, and semiconductors. The policy is designed to curb national security risks posed by the transfer of capital, knowledge, and supply chain leverage to strategic rivals like China, Russia, and Iran.
  • Sanctions priorities shifted under new leadership: The Treasury Department announced a pause on new enforcement actions under the Foreign Corrupt Practices Act (FCPA), while issuing new sanctions against financial entities in Russia and Venezuela. The Administration has emphasized that future sanctions will be more narrowly tailored to geopolitical threats.
• What’s next?
  • The GTO will run through September 9^th: Affected MSBs must verify customer identity, collect detailed information on transactions, and significantly scale up compliance operations. Institutions outside the GTO zone are also expected to adjust customer due diligence and transaction monitoring practices to account for spillover activity.
  • More to come on outbound investment compliance: Treasury will issue implementing regulations in the coming months.

Our take

Enforcement is narrowing — and intensifying. The FinCEN GTO and momentum behind potential CTR threshold reform reflect a broader shift in financial crime oversight: away from one-size-fits-all compliance and toward risk-based, intelligence-driven enforcement. Regulators expect firms to respond with targeted monitoring, real-time alerts, and more operational agility. For institutions operating near high-risk corridors or serving MSBs, the burden of CTR filings and customer due diligence is intensifying – even as Congress weighs long-overdue updates to outdated thresholds.

This is a moment for financial institutions to double down on programmatic strength: reinforcing AML governance, modernizing CTR and BOI workflows, reviewing sanctions screening thresholds, and preparing for more targeted supervisory reviews. As regulators narrow their focus, firms must sharpen their own – and invest accordingly in the systems, staff, and controls that define credible compliance in 2025.

• What happened?
  • Agencies announced they will propose to rescind the 2023 CRA final rule: In April, the OCC, Federal Reserve, and FDIC issued a joint statement indicating their intent to formally propose rescission of the 2023 modernization rule. The 2023 rule expanded assessment areas to include retail lending beyond branch footprints, added standardized performance metrics, and required increased data reporting. It was slated for phased implementation through 2031.
  • Legal challenge remains pending in federal court: A lawsuit filed by a coalition of bank trade groups in early 2024 has delayed enforcement of key provisions. The plaintiffs argue that the agencies exceeded their statutory authority by imposing new assessment requirements outside traditional geographic footprints and that they failed to consider compliance costs.
• What’s next?
  • A formal proposal to rescind the rule is expected in the coming months: The joint statement will be followed by a formal notice of proposed rulemaking and a public comment period. The current rule remains on the books until a final rescission is issued.
  • There is no clear timetable for a replacement rule: The agencies stated that they intend to coordinate on future modernization efforts, but no timeline or framework has been proposed. Agency resources may also be constrained due to budget cuts and internal reorganization.

Our take

Back to the drawing board. The rescission of the 2023 CRA rule was expected following legal challenges, industry opposition, and recent statements from regulators. While industry welcomed the withdrawal, especially given data burden and compliance uncertainty, the return to the prior rule means banks must once again navigate a patchwork of informal examiner interpretations and legacy frameworks that don’t fully account for digital channels or evolving community needs. The Agencies have stated that they will work together to promote a consistent CRA approach but considering the challenges of coordination and complex considerations necessary to propose a new framework, alongside expected cuts to agency staff, we do not expect to see a new proposal any time soon.

Still, institutions should not treat this as a regulatory pause. Mergers, branch changes, and supervisory exams will continue to surface questions about CRA performance – and banks will be expected to demonstrate consistent commitment to community reinvestment. This is a time to focus on quality execution under the existing rule, while continuing to document, measure, and communicate CRA-related activities. In the absence of a forward-looking framework, strong governance and transparency remain the best defense.

• What happened?
  • The OCC withdrew from interagency climate risk guidance: On March 31^st, the OCC announced it would withdraw from the interagency principles for climate-related financial risk management issued in 2023 with the Fed and FDIC. The principles, which focused on governance, scenario analysis, and risk disclosure, were characterized by Acting Comptroller Rodney Hood as redundant given existing safety and soundness standards.
  • Banking agencies withdrew from the NGFS: On January 17^th, the Fed announced its withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), citing a scope of work that exceeded the Fed’s statutory mandate. The FDIC followed suit on January 21^st and the OCC on February 11^th.
  • The SEC ended its defense of climate disclosure rules in court: On March 27^th, the SEC voted to end legal defense of its 2024 rule requiring public companies to disclose climate-related risks and greenhouse gas emissions. Commissioners Mark Uyeda and Hester Peirce voted to end the defense, citing procedural concerns and limits on SEC authority under the Administrative Procedure Act. On April 4^th, the SEC stayed implementation of the rule while litigation continues in the Eighth Circuit.
  • EOs targets state ESG policies: On April 8^th, President Trump issued an EO directing the Attorney General to identify and take action to stop the enforcement of state laws addressing climate change and involving environmental, social, and governance (ESG) initiatives, including environmental justice, emissions and carbon taxes.
• What’s next?
  • The SEC is expected to formally rescind its climate rule: With litigation effectively abandoned and leadership aligned in opposition, the rule will likely be withdrawn or replaced with voluntary guidance. The agency may still encourage narrative disclosures on climate risk as part of existing MD&A expectations.
  • Disclosure mandates continue outside federal agencies: Large institutions remain subject to the European Union’s Corporate Sustainability Reporting Directive (CSRD), which requires Scope 1–3 emissions reporting beginning in 2026, and California’s SB 253 and SB 261, which impose emissions and climate risk disclosure obligations on companies operating in the state.

Our take

Effective financial risk management remains in focus. While the Administration will likely continue to de-prioritize specific climate risk initiatives, banks must still recognize and manage the impact of physical and transitional climate risks on their strategies and clients. They should also expect examiners to continue evaluating how climate considerations are integrated into their credit, operational and market risk management programs, particularly for firms with significant exposure to areas and industries increasingly prone to natural disasters.

Communication of climate exposures is still an imperative. It is only a matter of time before the SEC’s climate risk disclosures are formally overturned by either a court ruling or new rulemaking. However, this will not eliminate the need for companies to understand and communicate their climate risk exposures and related risk management to key stakeholders, including boards, investors, counterparties and supervisors. In addition, many companies will remain subject to the European Union’s Corporate Sustainability Reporting Directive (CSRD) and California’s Climate Corporate Data Accountability Act (SB253), which requires large companies doing business in California to publicly disclose their greenhouse gas emissions, including Scope 1, 2, and 3 emissions, starting in 2026. Accordingly, companies need to continue to develop capabilities around climate data collection, scenario analysis, credit portfolio monitoring, analysis and reporting.

• What happened?
  • SEC Acting Chair Mark Uyeda outlined a new regulatory posture: On March 17^th, Uyeda gave a speech calling for longer comment periods, more robust cost-benefit analysis, and a return to statutory clarity in rulemaking. He directed SEC staff to reassess or withdraw several pending rules – including those on ESG disclosures, outsourcing by investment advisers, and the safeguarding of client assets – and encouraged pre-rule public engagement through concept releases and roundtables.
  • Paul Atkins confirmed as SEC Chair: On April 9^th, the Senate confirmed Paul Atkins – a former SEC Commissioner known for favoring market-led innovation and regulatory streamlining – as the new SEC Chair. In his confirmation hearing, he criticized the prior administration’s approach to ESG and complex disclosures, calling for “clarity, simplicity, and a focus on capital formation.” He also questioned the cost-benefit balance of programs like the Consolidated Audit Trail and supported revisiting fund disclosure reforms.
  • The SEC delayed implementation of key Treasury clearing rules: On February 25^th, the SEC extended the compliance dates for its expanded Treasury clearing rule by one year. Implementation will now begin at the end of 2026 for cash transactions and mid-2027 for repo markets. The SEC stated the delay was intended to ensure smooth implementation and avoid market disruption.
  • The CFTC revised its enforcement referral process: On April 17^th, the CFTC released a policy advisory limiting referrals to the Division of Enforcement to cases involving client harm, systemic risk, or knowing misconduct. It also formalized self-reporting credit and required oversight divisions to vet cases before escalation. This represents a shift toward proportional, risk-based enforcement actions.
  • The CFTC asked for comments on innovative changes: On April 21^st, the CFTC issued two requests for comment on the risks and oversight implications of always-on trading models and crypto-style perpetual contracts. The agency asked for public input on how clearing, surveillance, and customer protection standards may need to evolve to accommodate continuous markets.
• What’s next?
  • Implementation work must continue: Though enforcement deadlines were postponed, the requirements will be enforced in time. Market participants — including clearing members, broker-dealers, and indirect participants — must finalize operational readiness, particularly regarding margin segregation and access design.
  • Margin and risk models will draw ongoing attention: Expanded central clearing mandates enhanced intraday margin processes and stress-tested frameworks. Even before full implementation, participants are expected to align systems with future rule expectations.
  • Atkins will shape the SEC’s approach to structural reforms: As Chair, Atkins is expected to build on Uyeda’s deregulatory orientation. Staff are reviewing pending proposals to ensure they are tailored, legally grounded, and not overly burdensome. Rules on Form PF, ESG disclosures, and advisor outsourcing are expected to be revised or withdrawn.
  • Interagency coordination will remain central: The SEC will continue working with the Fed and Treasury to implement reforms incrementally while preserving market liquidity and functioning. Additional joint guidance or rulemakings are possible as implementation proceeds.

Our take

The SEC and CFTC are recalibrating toward innovation, cost-efficiency, and risk-based supervision. Acting Chair Uyeda and incoming Chair Atkins are steering the SEC away from sprawling, thematic rulemaking and back toward focused, statutory mandates. Firms can expect longer timelines, simpler disclosures, and a greater emphasis on feedback before proposals move forward. They should treat the extra time as an opportunity to shore up systems, assess existing frameworks and engage proactively with regulators. Atkins’ confirmation reinforces a shift toward regulatory restraint but implementation expectations remain high. Market participants that lead on transparency, access model design, and client coordination will be better positioned to shape and navigate the next generation of market infrastructure.

At the CFTC, the pivot is just as clear. The April enforcement memo reframes the agency’s posture around materiality and systemic risk, giving firms a stronger basis to self-report and resolve issues early. The 24/7 and perpetuals RFCs suggest a willingness to accommodate market evolution provided the risk management framework keeps up. Across both agencies, the message is consistent: rules should fit purpose, enforcement should fit risk, and markets should be given room to grow – under watchful but more predictable supervision.

The regulatory landscape is shifting – fast. In just 100 days, the Administration has undone key rules, reset agency priorities, and made clear that innovation, not intervention, will rule the day. But firms must not mistake flexibility for a license to relax core safeguards – supervisory accountability hasn’t disappeared and missteps can still carry real regulatory and reputational costs.

Here’s what firms should do now:

• Realign compliance and control functions with business strategy: Take advantage of new risk management to reallocate resources and structure these functions around strategic priorities rather than supervisory mandates, while preserving the rigor needed to meet core legal and stakeholder expectations.
• Stay agile in regulatory change management: Track rescinded rules, new proposals, and delayed implementation timelines across all key agencies. Build workflows that link rule changes directly to impacted functions, products, and controls.
• Use rule reviews to advocate: The Administration’s regulatory reviews offer a unique chance to engage on what is and isn’t working. Firms should submit formal comments, contribute to trade associations, and prepare to defend business models as rules are rewritten.
• Prepare for fragmented oversight: State attorneys general, foreign regulators, and market stakeholders are stepping up as federal regulators step back. Coordinate compliance across jurisdictions and prioritize high-consensus risk areas like AML, digital asset custody, and beneficial ownership.
• Define your digital assets strategy: The window to enter or expand into crypto, stablecoins, and tokenized services is open, and firms may be encouraged to act early to better position themselves to shape standards and gain trust. However, they should remain vigilant as to regulatory compliance responsibilities and the unique risks associated with the digital assets market.
• Align boards and executives on risk appetite: The deregulatory environment may tempt firms to move quickly – but risk tolerance must be explicit, not assumed. Engage boards and C-suites to reassess thresholds for customer due diligence, third-party oversight, and new product risk.

This is a window of opportunity – but also of recalibration. The firms that thrive will be those that innovate thoughtfully and remain tuned in to the full range of public, political, and market signals shaping what comes next.