Donald Trump’s election to the presidency for a second term brought dramatic changes to many U.S. institutions – and the Securities and Exchange Commission (SEC) was no exception. Almost immediately, mandatory climate-disclosure rules adopted on March 6, 2024, were signaled to be dead, and several enforcement cases concerning crypto were halted.
After Paul Atkins was sworn in as Trump’s hand-picked SEC Chairman on April 21, changes arguably accelerated. In May, SEC Commissioner Mark Uyeda spoke of “a major course correction” at the U.S.’s largest securities regulator in a presentation to the Practicing Law Institute.
H. Gregory Baker, Partner at the New York City office of Patterson Belknap Webb & Tyler, describes what’s occurring as “a fundamentally different view of the SEC and other administrative agencies in the United States.” He continues: “Whereas historically you had changes in priority emphasis, under this administration, there’s a really radical approach in terms of deregulation.”
Smoothing the way for sweeping ideological changes are structural changes, namely, Trump’s concerted efforts to slash the size of the U.S. federal government. From the start of 2025, SEC staff declined by around 15% as examiners, attorneys, and specialists took early retirement and a $50,000 buyout.
Increasingly, regulatory changes afoot in the U.S. are rippling through world markets. While Canadian Securities Administrators (CSA) Chair Stan Magidson says that his “focus is on what’s in the best interests of Canadian capital markets,” he also believes that the SEC’s actions have consequences for public companies in Canada.
Carol Hansell, Senior Partner at Hansell LLP in Toronto, makes a similar point: “What the U.S. is doing is always hugely relevant in Canada.”
Among the reasons that the SEC’s policies reverberate with such force is the tension between safeguarding investors and making sure that the Canadian market remains competitive, explains Hansell. “I don’t think any jurisdiction wants to be the most onerous jurisdiction because they fear people will incorporate in other places and use other capital markets,” she says.
What’s Changing at the SEC
While regulatory ebbs and flows are natural, “the changes we’re seeing at the SEC now are different because of their size and scope,” according to Notified’s Senior Director for Sales in Canada, Chris Makuch.
Discussed below are the SEC developments deemed most consequential for Canadian IROs.
New enforcement priorities
The current deregulatory mindset is transforming social issues like ESG and DEI (which are out of favour with the current administration) and reversing many of the Biden-era guardrails for crypto.
Areas in which Baker anticipates more robust SEC enforcement are fraud against retail investors, misleading disclosures, and accounting fraud and misstatements.
That said, he points out that a depleted SEC staff may result in the pursuit of fewer enforcement actions. What’s more, some of the largest personnel losses have occurred in key departments at the SEC. In statistics supplied to Reuters by the U.S. government, the SEC’s Office of the General Counsel, which serves as the agency’s chief legal advisor, has experienced a whopping 19.5% decrease in personnel.
Climate and ESG
Mandatory climate disclosure rules appear to be a non-starter in the U.S. for at least the next three years.
A few weeks after the SEC announced that it would no longer defend in court its climate-disclosure rules, the CSA said that it was also pausing work on National Instrument 51-107, its mandatory climate-related disclosure rule. In an April 23 press release, the CSA acknowledged that this decision was made in response to “recent developments in the U.S. and globally.”
In that release, Magidson, who not only chairs the CSA but is also Chair and CEO of the Alberta Securities Commission, said: “In recent months, the global economic and geopolitical landscape has rapidly and significantly changed, resulting in increased uncertainty and rising competitiveness concerns for Canadian issuers.”
Nor was Canada alone. In February, when the fate of the U.S.’s climate-disclosure rules seemed clear, the European Commission opted to delay its sustainability reporting rules by two years, while also narrowing the thresholds for which companies would eventually be affected.
Speaking to IR leader, Magidson explained that while “it wasn’t the right time to put our thumb on the scale” and depart from international regulators, Canadian issuers are “still obliged to disclose material climate-change risks.” In addition, he points out that while many climate disclosures are discretionary, companies in Canada now have an excellent set of voluntary guidelines, thanks to the inaugural standards released by the Canadian Sustainability Standards Board on December 18.
Jessica Butts, CEO of ESG Global Advisors in Toronto, says that a desire to harmonize securities regulations between Canada and the U.S. is understandable, given the large number of public companies registered in both countries. According to the TSX’s website, 192 public companies are currently dual listed.
For Canadian IROs with robust ESG communications programs, Butts urges a wait-and-see approach: “The mature companies on these issues recognize that the terminology is changing, but the core business impact and expectations aren’t changing as much as the political noise would have you think.” In addition, she notes that in the coming months, Prime Minister Mark Carney could introduce ESG tax incentives on large investments “to influence corporate behaviour in what would be more of a carrot, rather than a stick, approach.”
Butts continues: “This may not be the year to make huge investments in your ESG strategies or programs, but for the most part, we’d not suggest that folks publicly walk back from commitments.”
Cryptocurrency
On July 31, Atkins spoke about what he and Commissioner Hester Peirce have dubbed “Project Crypto.” He described the new crypto policy as “the SEC’s north star in aiding President Trump in his historic efforts to make America the ‘crypto capital of the world.’”
Baker pinpoints crypto enforcement as one of “the single biggest areas of change” at the SEC. He continues: “Trump campaigned in part on being more crypto friendly and having a more crypto-friendly administration. He himself has issued tokens and is profiting off them.”
As for what’s happened so far, effective January 30, 2025, the SEC’s Staff Accounting Bulletin No. 122 overrode existing rules that required additional disclosures and safeguards for crypto. In addition, a number of digital-asset enforcement actions have been withdrawn – with more likely to meet the same fate.
Board diversity, DEI, and other forms of proxy activism
One concrete change stemming from the new anti-diversity sentiment is the overturning of diversity requirements at Nasdaq. On December 11, the U.S. Court of Appeals for the Fifth Circuit struck down Nasdaq’s board diversity rules, arguing that the SEC had exceeded its authority in originally granting approval for them.
What’s more, in February the SEC issued Staff Legal Bulletin 14M, which revised Biden-era guidance on no-action requests for shareholder proposals. Experts believe that the new guidance will make it easier for the SEC to side with issuers – against shareholders – when it comes to granting no-action requests for ESG proposals and others, too.
Because of these changes, experts predict that the 2026 proxy season may look quite different from previous ones.
In 2025, shareholder activism already showed evidence of a loss of steam in both the U.S. and Canada. In the U.S., environmental proposals received less support in 2025 than they had in 2024, according to law firm Cooley, which is headquartered in Palo Alto, California. Environmental proposals received 13% support, down from 18% in 2024; meanwhile, social proposals garnered 12% support, compared to 15% last year.
Similarly, in Canada in 2025, “the distinct focus on racial and gender diversity as standalone topics all but disappeared from the proxy landscape,” wrote Norton Rose Fulbright, an international law firm headquartered in London.
Going Forward
The CSA is highlighting a new buzzword – “intelligent regulation” – for its latest three-year business plan, which was published on June 26, says Magidson. One concrete change is that issuers filing a prospectus for an IPO will only be required to provide two years’ worth of audited financial statements, down from three. As a possible future change, junior issuers in Canada could someday be permitted to report earnings semiannually, rather than quarterly.
Efforts like these to relax requirements, says Magidson, exemplify ways that the CSA is striving to relieve burdens on public companies without placing investors at risk.
He also says that in the coming months, Canadian regulators will continue to keep an eye on international developments at the SEC and beyond.
One very practical challenge that public companies in Canada face is assessing whether new SEC priorities will prove lasting or will be undone in three years, once the U.S. elects a new president, says Makuch.
Makuch continues: “You may have one company that says, ‘We’re going to keep focused on [ESG or DEI], and another that says, ‘This isn’t where we want to spend our time.’ Because the regulatory regime has changed, there’s nothing to stop either company from pursuing those actions.”
A confusing environment, yes. At the same time, in a world in which companies no longer march in lockstep, management has a unique opportunity to distinguish itself by choosing a path consistent with its own priorities.
“Changes are happening at the SEC, and the changes are dramatic,” concludes Makuch. “But what you’re seeing in Canada is that instead of relying solely on regulatory direction, decisions will increasingly be driven by the CEO and C-suite leadership.”