Can the SEC’s landmark reforms survive a Wall Street fightback?

Hanging on the wall in Gary Gensler’s office is a quote from a letter penned by Felix Frankfurter, later a Supreme Court justice, to President Franklin Roosevelt. It is dated 1934, the year the Securities and Exchange Commission was established to regulate markets.

It advises the president to appoint administrators “who have stamina and do not weary of the fight, who are moved neither by blandishments nor fears, who in a word, unite public zeal with unusual capacity.”

To his advocates Gensler, the chair of America’s securities watchdog and one of the most powerful regulators in the world, is just such an individual.

“Gary will be one of the most consequential chairs of the SEC in many, many decades because he has been so single-mindedly and fearlessly focused on protecting investors and the markets,” says Dennis Kelleher, chief executive of the Better Markets campaign group.

John Coffee, a professor at Columbia Law School, describes him as “the most activist commissioner since Arthur Levitt”, referring to the SEC’s longest-serving chair who was known for his interventionist tendencies.

From the outset of his term in 2021, Gensler has undertaken a sweeping reassessment of rules that have underpinned US markets for decades, just as the industry is adapting to new technologies, asset classes and market participants.

“It shouldn’t be that investors and issuers work for the markets and the market intermediaries in the middle,” he tells the Financial Times. Many of his reform projects focus on intermediaries in the equity, private capital and government bond markets to ensure “fair, orderly and efficient” operation, he adds.

He has so far proposed 67 rules, the highest number since Mary Schapiro, who neared 100 during her tenure after the global financial crisis, and more than recent predecessors Jay Clayton and Mary Jo White did during their full terms.

But Gensler’s reforms and his tough stance on enforcement, with targets ranging from top…