What to Expect from the SEC After Hester Peirce's Exit

Securities Enforcement Defense attorney Allison Kernisky was quoted in a Fund Directions article examining how Commissioner Hester Peirce's departure and the U.S. Securities and Exchange Commission's (SEC) single-party composition may affect the agency's policymaking, enforcement and oversight of regulated funds. Allison discussed what to anticipate from a leaner, two-commissioner SEC, including less internal deliberation about enforcement actions, delays in procession exemption orders, no-action requests or rule interpretations, and greater staff caution when considering novel requests – though it could also make for closer alignment between enforcement recommendations and commission approvals. She advised boards to monitor SEC actions and consult counsel when evaluating their implications.

"Actions taken with one or two commissioners may be challenged in the courts now or later, potentially injecting uncertainty," she said. "Boards overseeing funds may want to emphasize timing considerations and work with experienced fund counsel to flag any commission action taken without participation, which could become relevant if the action is later challenged."