SEC Chair Paul Atkins has declared significant deregulation progress in his first-year review, announcing a dramatic reduction in regulatory intervention by raising the mandatory filing threshold for private and hedge fund advisers from $150 million to $1 billion. The move, framed as eliminating 'unnecessary' rules, marks a pivotal shift in the Commission's oversight approach under the current administration's financial policy agenda.

What is the SEC doing to reduce burdens for private funds?

Speaking at The Economic Club of Washington, the Securities and Exchange Commission (SEC) Chair Paul S. Atkins celebrated his first year leading the agency. He measured his success by how many regulations the agency has removed, rather than how many it enacted.

Atkins argued that through the A-C-T (Advance, Clarify, Transform) strategy, which was introduced during his anniversary address, the SEC is returning to its core mission of facilitating capital formation rather than acting as an “imposing obstacle” to the markets.

Atkins told the audience of business leaders that he plans to deliver the “minimum dose of regulation” to allow markets to operate without excessive intervention. The SEC also announced its plans to reduce compliance costs, which include a joint proposal with the Commodity Futures Trading Commission (CFTC) to slash reporting burdens for private funds.

The current Form PF rules mandate investment advisers managing over $150 million in private funds to file confidential reports in order to monitor systemic risk. However, the proposal raises that limit significantly to $1 billion, eliminating filing requirements for smaller advisers who currently represent nearly half of all filers.

The proposal also raises the threshold for “large” hedge fund advisers from $1.5 billion to $10 billion in assets, although the SEC claims it will still capture data on over 90% of private fund gross assets.

How is the SEC changing the rules for crypto and IPOs?

In his keynote, Atkins laid out a vision to “Make IPOs Great Again.” He noted that when he left the SEC staff in 1994, over 7,800 companies were listed on U.S. exchanges, a number that has since dropped roughly 40%. 

To reverse this, the SEC is evaluating an IPO “on-ramp” and considering giving nearly all public companies the option to file reports on a quarterly or semiannual basis rather than the current quarterly filings.

Atkins also introduced a five-part taxing system for tokens that clarifies the legal status of crypto assets. Under the new framework, Digital Commodities, Collectibles (including Meme Coins), Tools, and Stablecoins are explicitly classified as non-securities. Only Digital Securities fall under full SEC jurisdiction. 

Furthermore, the SEC is preparing an “innovation exemption” that provides a 12-to-36-month window for firms to trade tokenized versions of equities and bonds on-chain without full registration, as long as they work toward compliance. 

A Memorandum of Understanding (MOU) was signed with the CFTC last month to harmonize definitions and end the “regulatory no-man’s-land” that previously stifled innovation.

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