SEC Commissioner Nominee Hearings Scheduled; Fallout Continues from Cyber Breach

The nominees for SEC commissioner are expected to testify before the U.S. Senate Banking Committee this month, the Wall Street Journal reported. Hester Peirce and Robert Jackson were selected by President Trump to fill the open Republican and Democratic seats on the Commission and are expected to be confirmed. SEC Chairman Jay Clayton has faced criticism since the disclosure of a cyber breach that may have facilitated illegal trading and exposed the personal information of two people. The agency has since faced pressure from lawmakers to delay the launch of the Consolidated Audit Trail, a data repository for trading information, and the Wall Street Journal reported that stock exchanges have considered seeking a delay for the program. However, the SEC would have to approve any delay. The developer of the CAT database has defended the program and said it should not fall victim to hackers. Meanwhile, lawmakers continue their push toward financial deregulation with several proposals from the Financial CHOICE Act advancing as separate bills in Congress. The proposals target the SIFI designation for certain banking entities, seek exemption of custodial banks like State Street and BNY Mellon from key capital requirements and repeal of the DOL Fiduciary Rule. The Fiduciary Rule measure aims to repeal the Department of Labor’s version and task the SEC with writing the rule. In recent testimony before lawmakers Clayton said he was concerned about proposed fiduciary standards cropping up among the states, including a measure in Nevada that has drawn pushback from the industry, the Wall Street Journal reported.