Trump’s Shadow Looms Over White’s Last Hill Appearance

By Rob Tricchinelli

Nov. 15 — SEC Chairman Mary Jo White’s final Capitol Hill appearance Nov. 15 was dominated by the approaching Trump administration, with Republican lawmakers urging her to keep a low profile during her final months in office.

“I would strongly urge you to respect the results of last week’s election and resist the temptation to finalize any regulations, including Dodd-Frank Title VII regulations, in deference to the right of the incoming administration to set its own priorities,” House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said.

The pending Title VII regulations on derivatives, which would impose capital, margin and segregation requirements for security-based swap dealers, have bipartisan support among the Securities and Exchange Commission’s members, who have said they are long overdue. Finishing those rules is a necessary step for other SEC swap dealer rules to take effect.

“I don’t see any last-minute rushes,” White, who will step down in January when Trump’s administration begins, said. “I do intend to carry out the agenda I outlined [for 2016] as best as I can.” That agenda includes the derivatives rules and a separate measure to regulate asset managers’ use of derivatives, White said at the hearing.

Rule Timing

White fielded skeptical questions over rule timing from several Republicans, including Rep. Bill Huizenga (R-Mich.), who has been a vocal critic of Dodd-Frank provisions dealing with executive compensation.

Huizenga wanted a promise from White to hold off on finalizing Dodd-Frank-mandated incentive compensation rules, proposed twice by the SEC and other federal financial regulators, that would make executives wait years to receive most bonus pay and require them to give money back if companies take large losses.

The rules were designed to rein in excessive speculation that contributed to last decade’s financial crisis, but critics like Huizenga portray them as activism that stunts growth and makes it difficult for companies to attract talented executives.

“I don’t think any rulemaking benefits from being rushed,” White said. She didn’t comment on whether the rule would be finished this year but added there was no last-ditch effort.

“This is something that has clearly been proceeding apace all year,” she said. “It’s not something that’s all of a sudden proceeding apace.”

Fiduciary Rule

White also signaled that a proposal imposing a best-interest advice standard on broker-dealers is not likely to come from the agency under her tenure, citing a lack of consensus among the three commissioners.

Such a rule would complement a Labor Department regulation from this year that requires brokers to act in the best interest of their clients when giving retirement advice.

While investment advisers face a best interest standard, broker-dealers need only give suitable advice under SEC rules.

The commission has had two vacancies in 2016, which amplifies the other commissioners’ influence over pending proposals.

“I’m one vote on this,” White said.

To contact the reporter on this story: Rob Tricchinelli in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

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