Current Month (October 2025)
SEC Chairman Atkins Highlights Importance of and Changes to the Wells Process
By Karen Liu, Reid & Wise LLC
On October 7, 2025, the U.S. Securities and Exchange Commission (“SEC”) Chairman Paul S. Atkins delivered a keynote address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law at Fordham School of Law.
During the speech, Chairman Atkins reiterated the significance of the Wells process as a “cornerstone of fairness,” “an extension of due process and fundamental constitutional rights,” and “a valuable procedural device that helps to guard against plain mistakes, extreme legal theories, misinformation, biases, and conflicts of interest.”
As explained by Chairman Atkins, the Wells process, which was formally adopted in 1979, is a mechanism that usually occurs at the end of an SEC investigation. Through the Wells process, the SEC’s enforcement staff notifies potential respondents or defendants of any charges that the staff intends to recommend to the SEC and the basis for those charges. The potential respondents or defendants are then provided an opportunity to make written or video “Wells submissions” to the SEC setting forth their interests and position on the subject matter of the investigation. These Wells submissions often provide the SEC with a different view of the facts and law concerning the investigated matter and sometimes can potentially persuade the SEC staff to believe that an enforcement action is not warranted in whole or in part, because the SEC staff does not always get things right the first time.
Among others, Chairman Atkins highlighted the following key points:
- Going forward, the SEC staff will provide the other side with at least four weeks (instead of two weeks) to make Wells submissions.
- In giving a Wells notice, Chairman Atkins expects the SEC staff to provide sufficient information for potential respondents or defendants to understand the potential charges and the evidentiary basis for those charges, such as testimony transcripts and key documents, except for certain confidential information such as whistleblower-identifying information and matters that would implicate a parallel criminal investigation.
- “Both sides should engage with each other in a courteous, professional manner.”
- When requested in a timely manner, senior enforcement leadership will meet with defense counsel before making a recommendation to the SEC, though “that does not necessarily mean multiple meetings.”
- All staff recommendations to the SEC must state whether the opportunity was provided for a Wells submission or explain why not.
In his speech, Chairman Atkins also made clear that going forward, staff from the Enforcement Division and applicable policy Divisions will present an offer of settlement in an enforcement action with a contemporaneous waiver request to the SEC for simultaneous consideration, unless the SEC determines that it wishes to consider them independently. That had previously been the practice until it was abandoned in recent years, often resulting in a siloed approach with uncertainty for settling parties and inefficiencies for the SEC and its staff.
By Noah B. Levin, WilmerHale
On October 9, 2025, the U.S. Securities and Exchange Commission (“SEC”) Chairman Paul S. Atkins delivered the keynote address as the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala. Chairman Atkins expressed his desire to reverse the trend of the decline of public companies and to “Make IPOs Great Again” by focusing on three pillars: (1) simplifying disclosure requirements to reduce costs while also increasing the comprehensibility of filings; (2) focusing shareholder meetings on director elections and significant corporate matters; and (3) reforming the securities litigation landscape.
Shareholder meetings, and specifically shareholder proposals, were the initial focus of Chairman Atkins’ address. In particular:
- Chairman Atkins cast doubt on the propriety of precatory shareholder proposals under Delaware state law and seemingly welcomed the opportunity for the SEC to certify the question to the Delaware Supreme Court.
- Following the enactment of a shareholder proposal section to the Texas Business Organizations Code, which would require a shareholder to own at least $1 million or 3 percent of a company’s securities to submit a shareholder proposal, Chaiman Atkins signaled that, in his view, if a company opts into the Texas law or otherwise has properly established conditions for shareholders to submit proposals in its governing documents, a proposal should be excludable under paragraph (i)(1) of Rule 14a-8 if those requirements are not met (regardless of the ownership thresholds enumerated in Rule 14a-8).
- Chairman Atkins expressed that, in his view, “a fundamental reassessment of Rule 14a-8 is in order,” including an assessment of whether the original rationale for adopting Rule 14a-8 in 1942 still applies given developments over the past eighty years.
Chairman Atkins closed out his address by discussing his views on the need to reform the securities litigation landscape, asserting that “meritless, vexatious, or frivolous litigation” is a factor in driving capital away from the U.S. public markets. Therefore, balancing the advancement of legitimate claims with reforms that lower the “cost” of being a public company is a priority for Chairman Atkins. In light of this view, Chairman Atkins critiqued Delaware Senate Bill 95 for prohibiting mandatory arbitration and fee shifting for federal securities law claims and urged state legislators to revisit these prohibitions.
European Commission Postpones Sustainability Disclosure Rules for Non-EU Companies, While Proposal to Delay and Pare Back Required Reporting Proceeds
By Noah B. Levin, WilmerHale
The European Commission has postponed its implementation of sustainability reporting standards for qualifying non-EU companies under the Corporate Sustainability Reporting Directive (“CSRD”). The effective date will now be no earlier than October 2027, delayed from an already postponed effective date of June 2026. The Legal Affairs Committee of the European Parliament also approved narrowing the applicability of the CSRD to non-EU entities, following a European Commission proposal (though further amendments may be made). If the revisions are accepted, the CSRD will generally only apply to companies with at least 1,000 employees and companies that generate at least €450 million in the EU. Despite the delay and likely narrowing in scope of the EU requirements, the continued existence of EU climate disclosure rules and California climate disclosure requirements serve as a reminder to companies that climate reporting considerations remain, despite the SEC ending the defense of its own climate disclosure rules earlier this year.
Government Accountability Office Probing Risks Related to Private Credit as SEC Chairman Atkins Says It Is Not a Systemic Risk
By Noah B. Levin, WilmerHale
The U.S. Government Accountability Office (“GAO”) is probing the risks posed by private credit, with a draft report assessing the regulatory landscape and how private credit is connected to the wider financial system expected by the spring of 2026, according to a document seen by Bloomberg News. The report is expected to be based, in part, on interviews with the SEC, other federal agencies, and market participants.
SEC Chairman Paul S. Atkins made his view on the private markets, including private credit, clear in a fireside chat at the Management Funds Association’s Policy Outlook 2025 event this October. At the event, Chairman Atkins said that “private markets are very important,” including private credit. However, he also noted that the private markets are not “systemically important” in the view of financial regulatory leaders in the Trump administration such that a bank-like regulatory regime is appropriate.
SEC Approves TXSE
By Spencer Shih, Riker Danzig LLP
On September 30, 2025, the U.S. Securities and Exchange Commission (“SEC”) issued an order approving the registration of the Texas Stock Exchange LLC (“TXSE”) as a national stock exchange under the Securities Exchange Act of 1934, a major milestone in the formation of a new exchange. In its press release, TXSE noted that trading as well as ETP and corporate listings on the TXSE are expected to launch in 2026. It further noted that it “has already completed its proprietary order matching engine and exchange platform, incorporating the latest hardware and software to deliver low-latency performance, flexibility, and scalability in an evolving trading and regulatory environment.” This is the first fully integrated national securities exchange to receive SEC approval in decades.
