SEC nominee outlines vision before Senate Banking Committee

Topline

• SEC nominee outlines vision before Senate Banking Committee

• HFSC continues capital formation push to expand access to more regions

• Tune in: Carta’s Head of Policy to testify in Congress next week

• HFSC revamps stablecoin bill in advance of markup

• SEC Small Business Forum: April 10

• Quick hits

Atkins gets his moment in the spotlight

Paul Atkins, President Trump’s nominee to lead the SEC, appeared before the Senate Banking Committee this week. During the confirmation hearing, Atkins outlined his vision and policy priorities for the agency, which include:

• Developing a principled regulatory framework for digital assets

• Reexamining the JOBS Act to boost capital formation

• Addressing barriers for companies to go public, including litigation risk and corporate governance reforms

Democrats targeted Atkins’s potential conflicts stemming from his consultancy and alleged oversight failures during his term as an SEC commissioner that led up to the 2008 financial crisis. They also sought assurances of SEC independence under his watch. Private capital also came under fire.  

PFA dead, but not forgotten. Democratic Sens. Jack Reed and Tina Smith used their limited time to criticize the exponential growth of the private equity industry and called for additional regulation to increase transparency around fees and conflicts of interest. Sen. Reed expressed concerns about increasing retail access—even through a regulated fund model—due to the risky and illiquid nature of private assets.

Don’t worry, we do not expect Atkins to resurrect the private fund adviser rules or pursue similar initiatives. If anything, the SEC will expand additional avenues for everyday investors to get more exposure to private funds (which we support). But the fact that two senators devoted attention to private equity given the range of other topics they could have asked about shows that the push for greater oversight of the industry remains. If history is a guide, political sentiment will inevitably swing back to the left, and this scrutiny underscores the need to shape a workable regulatory framework to help prevent the drastic shifts we’ve seen in recent administration changes.

What’s next: Senate Banking needs to vote Atkins out of the committee, which will likely happen in the next two weeks. Indications are that he will be confirmed by the full Senate and in seat by the end of April, though it could slip into May with the two-week Easter recess.  

HFSC continues efforts to expand capital formation

The House Financial Services Committee continues its efforts to expand capital formation with a focus on driving capital to areas outside of the traditional tech funding hubs.

Why it matters: Private capital fuels startups and growth-stage companies, providing patient, risk-tolerant funding to tackle ambitious challenges. This system fosters innovation, drives economic growth, and creates jobs. Private capital has grown exponentially, but it is not evenly distributed. California continues to dominate, with nearly 50% of venture capital raised on Carta going to companies in the state. With the recent VC slowdown, the number of new funds continues to fall, while the average fund size gets bigger and capital becomes more concentrated. The effects on emerging managers will have knock-on effects across the system, as these funds are more likely to invest early, invest locally, and invest in underrepresented and first-time founders. 

To unlock private capital’s full potential, we must not only bolster it, but expand its reach to more entrepreneurs, more investors, and more communities.

Policy outlook: The committee is expected to begin moving capital formation legislation later this spring. A drastic overhaul of the private market ecosystem is unlikely, but targeted changes are possible, like increasing on-ramps for accredited investors, creating pathways that provide structured access to private funds, and easing regulatory frictions to allow emerging managers to raise capital from more investors. 

Engagement matters: Carta and its coalition partners submitted letters in support of many of these goals, and will continue to engage on ways to broaden access and increase investment opportunities. The Committee has requested public feedback on these issues, including:

• Access to capital: What are the greatest barriers to raising capital, what is working well, what can be improved

• Expanding private capital: How to grow entrepreneurial ecosystems and lower barriers for emerging managers

• Investor access: Avenues to expand retail investor access to private funds and modernize the accredited investor standard

• Role of technology: How funds are leveraging technology and how AI and blockchain can be used to expand private market access

Carta Policy will continue engaging with and collecting feedback from stakeholders to share with policymakers on these important initiatives. Please reach out if you would like to get involved and share  your experience.

Speaking of engagement…

Carta’s Head of Policy, Anthony Cimino, will be testifying before the House Committee on Small Business on how investment fuels small business growth. We’ll do a recap next week, but you can watch it live here on Wednesday, April 2 at 10:00am ET / 7:00am PT.

HFSC revamps stablecoin bill in advance of markup

HFSC leaders formally introduced its stablecoin bill, the STABLE Act, with bipartisan support. The committee is expected to markup the legislation next week. Despite ongoing bipartisan discussions, Ranking Member Maxine Waters is expected to oppose the bill.

What to watch: Advancing a stablecoin legislative framework is widely supported: The STABLE Act was introduced with three Democrats, and the Senate GENIUS Act advanced with a strong bipartisan vote out of committee over the objections of Sen. Elizabeth Warren. The Trump family crypto venture’s announcement of plans to launch its own stablecoin made that path forward a little more difficult. 

Policy outlook: Ultimately we expect Congress will pass stablecoin legislation, as Democratic supporters highlight the need for regulation regardless of Trump’s crypto involvement. But it may not have the level of support that was originally anticipated and could complicate other crypto policy efforts.

SEC Small Business Forum: April 10

Mark your calendars: The SEC’s Small Business Forum is back and in person. The Forum provides members of the public and private to collaborate on recommendations to improve capital-raising policy for small businesses from startups to smaller public companies and their investors. Members of the public can suggest and vote on policy recommendations, which will also be submitted in a report to Congress, and many bipartisan efforts stem from these industry-led recommendations. You can submit policy recommendations by April 9.

Register here to attend in person or catch it live on sec.gov. 

Quick hits

• SEC votes to end defense of climate risk disclosure rule. With the SEC’s withdrawal, the controversial rules adopted under former Chair Gary Gensler that mandated public company climate risk and greenhouse gas emissions disclosures are essentially dead. But the climate disclosure debate is not over: California adopted more stringent climate disclosure rules (which are currently being challenged), and other states are moving forward with their own climate laws.

• FinCEN issues rule to remove beneficial ownership reporting requirements for U.S. persons and companies. Foreign reporting companies are still required to file beneficial ownership information reports with FinCEN. Foreign reporting companies that existed before March 26, 2025, must file an initial BOI report by April 25, 2025; foreign entities that become reporting companies after March 26, 2025, have to file within 30 days of being registered to do business in the U.S.

• Delaware adopts corporate law amendments. These changes address recent scrutiny that have caused high-profile exits from the state and provide clarity on controlling stockholder definitions, establish mechanisms for resolving conflicts of interest, enhance protections for independent directors, and ensure corporations can plan transactions with greater certainty. 

• Bank regulators push big policy changes. The FDIC and OCC announced they would eliminate considerations around reputational risk in its exam and supervisory functions, practices that have come under scrutiny as potentially discouraging banking relationships with lawful, but politically sensitive, industries. The banking regulators have also announced plans to scrap the Biden-era updates to the fair lending rules that aimed to reflect the rise of online banking.  

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