Yesterday senators and SEC watchers gained a glimpse into the mindset of Trump's pick for the regulatory agency's next commissioner.

Elad Roisman SEC Commissioner (nominated)

Elad Roisman appeared before the U.S. Senate Committee on Banking, Housing and Urban Affairs for a joint confirmation hearing (alongside nominees for president of Ginnie Mae, inspector general of HUD, and director of the Office of Financial Research). After opening statements from Roisman, Senator Mike Crapo (R-Idaho and committee chair), Senator Sherrod Brown (D-Ohio and ranking member of the committee), and the other nominees, the senators asked their questions.

For Roisman and his questioners, the big subjects included SEC enforcement, cybersecurity, the importance of cost-benefit analysis (Roisman is a fan) and of course the fallen DoL fiduciary reg and the SEC's proposed replacement. Roisman faced an audience that was at least partially friendly and familiar, as he currently serves as the same Senate committee's chief counsel.

On the fiduciary and best-interest standard discussion, Roisman insisted that he can't pre-judge the SEC's proposed rules. Yet he voiced some support nonetheless.

"It's important for the SEC to have acted," Roisman said in response to questions from Senator Mike Rounds (R-South Dakota). Later, in response to a question from Senator Thom Tillis (R-North Carolina), Roisman called the SEC's proposal "a good first step."

Roisman also seemed to come down more in favor of the philosophy behind the SEC's proposal (namely, emphasizing disclosures), versus the idea of having a uniform fiduciary standard for all advisors.

"It's important to consider whether the rule is business-model neutral ... not picking winners and losers," Roisman told Rounds.

"It's important for there to be investor choice," Roisman added in response to questions from Senator Robert Menendez (D-New Jersey). "It is important for investors to understand the nature of their relationship with their financial services provider."

Indeed, when Senator Elizabeth Warren (D-Massachusetts) grilled Roisman as to "why should your broker be able to have serious conflicts of interest," in contrast with doctors and lawyers, Roisman demurred that he wants "a better sense of what is happening in this space." Yet he also stressed that "the SEC has traditionally been a disclosure agency" built around the idea of providing information to investors "so they can make informed decisions."

Roisman, who is from Maine and once worked under Republican SEC commissioner, Daniel Gallagher, was nominated by President Trump last month. If confirmed, Roisman would fill the Republican SEC commissioner seat vacated earlier this month by Michael Piwowar.  

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