Regulatory Reset:

Author:

Victoria Olson DeLucia, CRCP®
Director of Institutional Engagement at Confluence

On June 12, 2025, the SEC announced the formal withdrawal of 14 pending rule proposals originally introduced under former SEC Chair Gary Gensler. These included sweeping initiatives across a broad spectrum of regulatory priorities:

• Outsourcing by Investment Advisers
• Safeguarding Advisory Client Assets (the “Custody Rule”)
• Cybersecurity Risk Management for advisers and funds
• Regulation Best Execution for broker-dealers
• Enhanced Disclosures of ESG Practices
• Conflicts of Interest Associated with the Use of Predictive Data Analytics conflicts
• Exchange and ATS oversight reforms

Withdrawing these proposals ends their current rulemaking process. Each is now off the regulatory table, requiring a fresh notice-and-comment cycle to be reconsidered.

What This Means for Advisers and Other Registrants

• Paused priorities: Implementation of new rules on outsourcing, custody, cybersecurity, and ESG is on hold for now. Any future efforts will start anew. Firms can pause any implementation planning for these proposals.
• Strategic shift: Recent developments – such as paused priorities, a 17% staff cut, and suspension of the SEC’s insider-trading surveillance system – suggest a shift toward reduced regulatory activity and resource reallocation.
• Still on track, prepare to comply!
• FinCEN’s AML Rule for advisers remains scheduled for January 1, 2026.
• The SEC/FinCEN Customer Identification Program (CIP) proposal, while unwithdrawn, awaits further joint rulemaking. Even without a final rule, comprehensive Customer Identification Programs are key to effectively preventing and detecting potential money laundering and terrorist financing activities.
• Regulation S-P amendments (cyber incident response, data protection) continue toward implementation.

Key Takeaways for Compliance Officers

1. No immediate new compliance obligations have been introduced—for now. Resources allocated to preparing for the withdrawn rules can be redirected elsewhere.

2. Maintain current controls. Even without rule changes, SEC scrutiny will remain high on key risk areas including cybersecurity, outsourcing, ESG, and custody. Each is a core element of fiduciary duty.

3. Stay ready. Any future re-proposal on these issues will require refreshed policies, systems, and public comment participation.

4. Focus on imminent requirements—AML/CIP/Reg S-P—already final or moving forward on a firm timeline. Confluence Compliance Services can help!

Bottom line

The SEC’s June 12 withdrawal marks a clear regulatory pivot. While the withdrawal reduces near-term compliance pressure, firms should treat it as a temporary pause rather than a permanent change. Existing compliance obligations remain—and the landscape could still shift if the agency decides to circle back on any of these shelved proposals.

How Confluence Compliance Services Can Help

While regulatory priorities may change, core compliance principles remain essential. At Confluence Compliance Services, we help investment advisers, broker-dealers, funds, TAMPs, and other market participants stay prepared and exam-ready—regardless of the Commission’s pace. Our core services are built to support firms through both active and dormant regulatory cycles:

• Maintain customized, up-to-date compliance manuals that evolve with your business and the regulatory landscape
• Provide ongoing or outsourced CCO support to handle day-to-day compliance tasks and annual review obligations
• Monitor and interpret regulatory changes to ensure timely implementation of final rules like AML and Reg S-P
• Conduct mock SEC exams and forensic testing to proactively identify gaps before regulators do
• Develop and review core compliance programs (e.g., cybersecurity, outsourcing oversight, AML, privacy) to reflect risk-based best practices—even where rules are withdrawn or pending

Whether you're scaling, reassessing, or just trying to keep pace—Confluence offers clarity, consistency, and calm. Contact us to see how we can right-size your compliance program with efficiency and confidence.

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About Confluence

Confluence is a global leader in enterprise data and software solutions for regulatory, analytics, and investor communications. Our best-of-breed solutions make it easy and fast to create, share, and operationalize mission-critical reporting and actionable insights essential to the investment management industry. Trusted for over 30 years by the largest asset service providers, asset managers, asset owners, and investment consultants worldwide, our global team of regulatory and analytics experts delivers forward-looking innovations and market-leading solutions, adding efficiency, speed, and accuracy to everything we do. Headquartered in Pittsburgh, PA, with 700+ employees across North America, the United Kingdom, Europe, South Africa, and Australia, Confluence services over 1,000 clients in more than 40 countries.

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