This month in the DC Insider, a House bill could mean an influx of capital and investors for private markets moves to the Senate, an Executive Order aimed at increasing oversight of the proxy advisory industry, an FTC workshop on noncompete agreements, and more. Get insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.
Supreme Court
- The President’s Ability to Fire Regulators Likely to Expand – The Supreme Court appears poised to allow President Trump to fire a Commissioner at the Federal Trade Commission (FTC), following oral arguments in December 2025. A ruling (which is expected toward the end of the Court’s term in June or July) in the President’s favor would overturn a 90-year-old precedent that is meant to insulate Senate-confirmed members at dozens of independent regulatory agencies. Justice Brett M. Kavanaugh said independent agencies lack accountability, adding that “I think broad delegations to unaccountable independent agencies raise enormous constitutional and real-world problems for individual liberty.” At the same time, Justice Kavanaugh expressed a desire to distinguish the Federal Reserve from other agencies.
Congress
- House Passes Bill to Expand Markets, Moves to Senate – Private markets could get an influx of capital and investors under legislation approved by the House of Representatives. The package of capital-formation bills, called the INVEST Act, passed the House 302 to 123, with 87 Democrats joining all Republicans. In fact, the INVEST Act contains 22 different pieces of legislation. Among them is the DEAL Act, which raises the limit on how many secondary and fund-of-funds investments a VC fund can make while maintaining its exemption. It also expands the accredited investor process by allowing investors to become accredited by taking an exam approved by the Securities and Exchange Commission (SEC). Lawmakers say the measure will help more companies go public and increase capital formation for startups.
SEC
- Proxy Advisors Oversight Sought– President Trump signed an Executive Order (EO) aimed at increasing oversight of the proxy advisory industry, charging that top firms often “advance and prioritize radical politically-motivated agendas.” The EO directs the Securities and Exchange Commission (SEC) and other agencies to review if top proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis had violated rules or antitrust law. Specifically, the SEC was tasked to review rules and guidelines regarding the proxy advisory industry, including revising or rescinding any related to DEI and ESG. The EO also directs the agencies, including the Federal Trade Commission (FTC) and the Labor Department, to consider steps such as new regulations. Indeed, the first sentence of the EO makes clear the President’s positioning: “Unbeknownst to many Americans, two foreign-owned proxy advisors, Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, play a significant role in shaping the policies and priorities of America’s largest companies through the shareholder voting process.”
- “Make IPOs Great Again” and Other Changes for the Future – In a wide-ranging speech at the New York Stock Exchange (NYSE), SEC Chairman Paul Atkins articulated a series of initiatives, including a need to update corporate disclosure rules to help more companies go public. Atkins addressed the need to refine the Commission’s reporting requirements, offer more companies relief from certain disclosure rules, extend the IPO on ramp for new issuers, and reform disclosures on executive pay, among other topics. He noted that: “If we want the next generation of innovators to choose our public markets, we need disclosure that is calibrated for a company’s size and maturity.”
- Rules on Auditor Conflicts of Interest Considered – SEC Chief Accountant, Kurt Hohl, is evaluating whether to change rules around conflicts of interest for auditors and their clients, how the Public Company Accounting Oversight Board (PCAOB) handles inspections of accounting firms, and the cost for companies of complying with requirements. Echoing a familiar theme from the SEC over the last year, he said, “What we don’t want to happen is essentially a high compliance cost to dissuade companies from accessing the public market.”
- Short Sale Rule Delayed Again – The SEC delayed for the second time this year the deadline for hedge funds and other big investors to comply with much-watched disclosure rules for short selling and related stock lending. Investment managers will now have until January 2, 2028, to comply with the short-sale rules, and until September 28, 2028, on the related stock lending disclosures.
- Analyst Restrictions Eased – The SEC lifted some restrictions on financial institutions with respect to conflicts of interest involving investment banks and their research analysts. The Commission agreed to modifications requested by financial institutions to release them from some requirements imposed under settlements in 2003 and 2004. A 2015 rule adopted by the Financial Industry Regulatory Authority (FINRA) addresses conflicts of interest between investment bankers and research analysts who work for the same company so there is no need for the duplication.
- Short Sale Rule Delayed Again – The SEC delayed for the second time this year the deadline for hedge funds and other big investors to comply with much-watched disclosure rules for short selling and related stock lending. Investment managers will now have until January 2, 2028, to comply with the short-sale rules, and until September 28, 2028, on the related stock lending disclosures.
- A Republican-Only Commission – With the departure of SEC’s lone Democrat Commissioner, Caroline A. Crenshaw, three Republican Commissioners remain atop the SEC. No nominations to fill the two Democrat seats have been made at this time.
FTC
- Workshop on Noncompete Agreements Scheduled for January 2026 – The Federal Trade Commission (FTC) will host a workshop, titled “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.” The workshop is part of the FTC’s efforts to highlight the negative impact of noncompete agreements on American workers and put business on notice of its current enforcement priorities. The workshop will be hosted by the FTC’s Joint Labor Task Force, which was created by Chairman Andrew Ferguson and follows a series of recent related enforcement actions; a series of letters sent to healthcare companies warning them to review and eliminate any anticompetitive noncompete agreements they may have; and a broad request for information seeking tips to lead to further enforcement actions.
- FTC Warns 10 Companies on New Consumer Review Rule – The FTC sent letters to 10 unnamed companies, warning them of potential violations of the agency’s Consumer Review Rule, which prohibits certain deceptive or unfair conduct related to the use of product reviews in advertising and marketing. The letters were based on customer complaints. The Rule prohibits reviews and testimonials that misrepresent whether a reviewer’s experience was positive or negative, or whether the reviewer used the product or service at all. It also prohibits businesses from conditioning compensation or other incentives on reviewers expressing a particular sentiment, either positive or negative, or from failing to disclose when reviews are written by company insiders or their immediate relatives. The Rule contains additional provisions relating to company-controlled review websites, suppressing certain reviews, and misusing indicators of social media influence like the number of followers or views. The FTC’s warnings come after the agency discovered that the companies were using contract terms that might prevent customers from posting honest reviews or penalize them for doing so.
CFTC
- New Chairman Takes Office – Pro-crypto regulator Michael Selig is now the Chairman of the Commodity Futures Trading Commission (CFTC). Previously, Selig was chief counsel for the SEC’s crypto task force in addition to advising SEC Chairman Paul Atkins. As a result, the CFTC will deepen coordination with the SEC and other agencies on crypto market structure, safe harbors, and cross-market rulemakings.
- Rules of Practice Amended – Earlier in December, then-Acting Chairman Caroline D. Pham announced the Commission had amended its Rules of Practice and its Rules Relating to Investigations. The amended Rules of Practice enhance the transparency of the Commission’s enforcement actions, including changes to ensure an accurate and complete administrative record by improving internal memoranda to the Commission when the Division of Enforcement recommends an enforcement action. The amended Rules Relating to Investigations enhance due process when the Division of Enforcement notifies persons who may be named in an enforcement action (Wells process), ensuring that notice of potential charges and relevant facts supporting the allegations are provided.
DOJ
- New Single Corporate Enforcement Policy Expected – In a December 2025 speech, Deputy Attorney General Todd Blanche announced that the DOJ expects to issue a corporate enforcement policy that will apply to criminal cases across the Department. The purpose of this forthcoming policy will be to promote consistency and transparency of prosecutorial conduct by all DOJ components, not just the DOJ Criminal Division. Blanche said, the new single policy will “help provide certainty and transparency regardless of the specific prosecutors involved in the investigation,” and will ensure that every case is handled in an “even-handed” The core tenets will incentivize good corporate conduct (for example, self-disclosure and cooperation); ensuring individual accountability; and applying the evidence-based approach related to corporate enforcement to individuals.
China
- Outbound Investment Restricts Enacted – A key provision in the annual National Defense Authorization Act (NDAA) that President Trump signed in December give the U.S. new powers to screen and restrict domestic investment in Chinese technology firms. The outbound investment provisions cites entities in China and other countries of concern (including Cuba, North Korea, Venezuela, and Russia) that develop “dual-use” technologies with commercial and military applications. The legislation cements a Biden Administration Executive Order by codifying and expanding the ability to monitor and, in some cases, block S. financing of Chinese work on emerging technologies, including artificial intelligence, quantum computing, and advanced semiconductors.
- SEC Action on Chinese Companies Urged – House Select Committee on China Chairman John Moolenaar (R-Mich.) and Sen. Rick Scott (R-Fla.) sent a letter to SEC Chairman Atkins urging decisive action to enforce existing laws, request information on any legislative action needed to protect investors, and remove Chinese companies from U.S. stock exchanges. The two continue to push the SEC to delist Chinese companies that pose serious national security and investor protection risks. They previously wrote to Atkins in May and July last year.
