It looks like Gary Gensler, a Washington bogeyman for some fundsters and cryptocurrency players, will be cutting his term short after all.

Gary Gensler U.S. Securities and Exchange Commission Outgoing Chair

This afternoon, Gensler publicly confirmed that he plans to step down as chair of the U.S. Securities and Exchange Commission (SEC) on January 20, 2025. That's inauguration day, when outgoing U.S. President Joe Biden will pass the reins to President-Elect Donald Trump. Trump has not yet officially picked someone to take the mantle from Gensler.

Hester Peirce U.S. Securities and Exchange Commission Commissioner

Gensler's announcement comes six months after Gensler, in an onstage conversation at an industry conference, reminded ICI CEO Eric Pan that Gensler's term as an SEC commissioner is scheduled to end on June 6, 2026 (and not with the change of presidential administrations in 2025). So fundsters and other SEC-watchers can be forgiven for wondering if Gensler was planning to stick around at the SEC next year, despite Trump's return.

Mark Toshiro Uyeda U.S. Securities and Exchange Commission Commissioner (R)

Biden picked Gensler as the 33rd SEC chair before the last presidential handoff almost four years ago, in January 2021, and Gensler was confirmed that April. Since then, the SEC under Gensler passed new money fund regs. (The regs passed in 2023, over objections from fundsters and from the SEC's two Republican commissioners, and a key piece took effect last month.) Earlier this year, Gensler's SEC also reluctantly approved the launch of both spot bitcoin ETPs and spot ether ETPs, reversing course on its opposition to the decade-long push after a 2023 SEC defeat in federal court. And Gensler has also championed the idea of forcing mutual funds and CITs to use swing pricing, much to the chagrin of some fundsters and retirement plan industry insiders.

Daniel M. Gallagher Robinhood Chief Legal, Compliance, and Corporate Affairs Officer

"I'm very proud of the work that we did," Gensler told Pan back in May. "The risk in the money market fund field was more accentuated in this one area ... I think the system's safer and will be even safer after October."

With Gensler exiting, whom will Trump pick to lead the SEC for his second term? It probably won't be Jay Clayton, who served as SEC chair during Trump's first term, as the president-elect has already picked Clayton to serve as U.S. Attorney for the Southern District of New York. Perhaps Trump will pick one of the two current Republican commissioners: Hester Peirce (whose current term expires in 2025 and who was initially appointed by Trump during his first term, after being nominated by Obama) and Mark Uyeda (who was appointed by Biden in 2022 and whose current term expires in 2028).

Or perhaps Trump will bring back a former commissioner to succeed Gensler. Multiple publications (including the New York Post, Politico, and Reuters) reported earlier this month that Dan Gallagher is on Trump's "short list" under consideration to lead the SEC. Gallagher is somewhat of a contrast to Gensler. Gallagher served as a Republican SEC commissioner during the Obama administration (during which he sparred with one SEC chair over some money fund regs before helping approve modified money fund regs under the next chair). And Gallagher, who joined discount brokerage Robinhood four years ago as chief legal officer (and now serves as chief legal, compliance, and corporate affairs officer there), is seen as having a different take on cryptocurrency. (Robinhood has revealed that it has been cooperating with an SEC investigation into the brokerage's "cryptocurrency listings, custody of cryptocurrencies and platform operations."

Today, Gensler lauds the SEC as "a remarkable agency," and he describes the people there as "deeply mission-driven, focused on protecting investors, facilitating capital formation, and ensuring that the markets work for investors and issuers alike."

"The staff comprises true public servants," Gensler states. "It has been an honor of a lifetime to serve with them on behalf of everyday Americans and ensure that our capital markets remain the best in the world":

I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favor. I've greatly enjoyed working with my fellow Commissioners, Allison Herren Lee, Elad Roisman, Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga. I also thank Congress, my colleagues across the U.S. government, and fellow regulators around the world.

Well before taking over the SEC under President Biden, Gensler led another federal regulator, the SEC, during the Obama administration. He also served as a U.S. Senate staffer and before that as an Assistant Secretary of the Treasury during the Clinton administration. He also spent 18 years with Goldman Sachs, where he was in investment banking. He is an alumnus of the University of Pennsylvania's Wharton School. 

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