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Republican frustrations grow as SEC chairman proves frequent allied by Democrats

WASHINGTON (Reuters) – Republicans are starting to wonder if they accidentally picked up a Democrat to drive the country's highest securities regulator. PHOTO PHOTO: Jay Clayton testifies to a Foreign Ministry's Department of Foreign Affairs that he will chair the Securities and Exchange Commission (SEC) at Capitol Hill, Washington, USA, March 23, 2017. REUTERS / Jonathan Ernst / File Photo Jay Clayton was appointed by the Trump Administration as chairman of the US Securities and Exchange Commission (SEC) with a party mandate to help public companies by disregarding rules and enforcement. But the SEC chairman – an independent – has cautiously moved on government change and sided with democrats in more than a third of crucial votes since he came to the office. A two-part consensus builder in its 20 months leading the SEC, Clayton has emerged as a surprising source of frustration among Republican legislators and some corporate groups. While the former Wall Street attorney represents a step to the right from his democratically picked predecessor, many republicans and industry lobbyists say he is not aggressive enough to drive President Donald Trump's business-friendly agenda. "The relationship … has not been one where we are exactly on the same side, but we communicate," said Republican representative Bill Huizenga, who stands for the subcommittee of the House of Representatives over the capital markets and meets Clayton on a regular basis. "Has he personally done more? Could the SEC have done more? Maybe," he said, adding that he did not believe Clayton…

WASHINGTON (Reuters) – Republicans are starting to wonder if they accidentally picked up a Democrat to drive the country’s highest securities regulator.

PHOTO PHOTO: Jay Clayton testifies to a Foreign Ministry’s Department of Foreign Affairs that he will chair the Securities and Exchange Commission (SEC) at Capitol Hill, Washington, USA, March 23, 2017. REUTERS / Jonathan Ernst / File Photo

Jay Clayton was appointed by the Trump Administration as chairman of the US Securities and Exchange Commission (SEC) with a party mandate to help public companies by disregarding rules and enforcement. But the SEC chairman – an independent – has cautiously moved on government change and sided with democrats in more than a third of crucial votes since he came to the office.

A two-part consensus builder in its 20 months leading the SEC, Clayton has emerged as a surprising source of frustration among Republican legislators and some corporate groups.

While the former Wall Street attorney represents a step to the right from his democratically picked predecessor, many republicans and industry lobbyists say he is not aggressive enough to drive President Donald Trump’s business-friendly agenda.

“The relationship … has not been one where we are exactly on the same side, but we communicate,” said Republican representative Bill Huizenga, who stands for the subcommittee of the House of Representatives over the capital markets and meets Clayton on a regular basis.

“Has he personally done more? Could the SEC have done more? Maybe,” he said, adding that he did not believe Clayton had a political agenda.

Clayton is one of several financial regulators recruited by former White House financial adviser and Democrat Gary Cohn, which proves to be much more moderate than predicted by Republicans and industry groups. Others who control a cautious course on financial rules are Federal Reserve Vice Chairman Randal Quarles, Federal Deposit Insurance Corporation’s CEO Jelena McWilliams, and Chris Giancarlo, Chairman of the Commodity Futures Trading Commission.

Representatives of Giancarlo, Quarles and McWilliams refused to comment. A Cohn representative did not respond to a request for comment.

Republicans run Clayton both publicly and privately to act more quickly on actions recommended by the US Treasury Department in October 2017 to promote public business information and increase private equity access to capital.

Of more than 30 recommendations, including review of crowdfunding rules, modernization of shareholders voting rules and open private business to more investors, the SEC has so far made progress on just a handful.

Diego Zuluaga, Political Analyst at the Liberal Cato Institute, said the current SEC lacks the “vision of market-driven change” that many conservatives had hoped to look at as trade, capital formation, cryptography and new technologies.

“You can expect more active leadership from regulatory authorities who said that this will not be as usual.”

Clayton’s voting record of regulations and enforcement measures has also raised eyebrows in conservative circles.

In full strength, the SEC has two democratic and two Republican commissioners, with the chairman who usually decides a crucial vote.

A Reuters analysis of Clayton’s voting record at the end of November shows that the 75 votes split the party leaders, Clayton with 37 percent of democratic commissioners. To his voice, his ancestor, Mary Jo White, voted with the Republicans only 15 percent of the time, according to an analysis of the last 20 months of her mission.

The SEC is usually divided into enforcement measures, with Democrats who typically support hard sentences and Republicans prefer a softer contact. Clayton has been sitting with Democrats to take charges of Merrill Lynch, Citigroup ( C.N ) and TD Ameritrade ( AMTD.O ), among other things. The SEC refused to comment, but Clayton told the Senate last week, the SEC had taken “meaningful” steps towards his goal of creating an innovative and responsive agency and facilitating capital formation.

“Under the leadership of Clayton’s leadership, the SEC has been a critical partner for working with the Ministry of Finance to promote the president’s core principles of financial regulation,” said a government spokesman.

NO “GUNSLINGER”

Clayton’s record so far reflects his leadership approach to gathering feedback and identifying consensus areas, say those who have been dealing with him.

The SEC chair is ready to postpone division heads, take advice from its staff and is willing to listen to all sides, say lobbyists and legislators.

“I have not seen him be a gunsmith. Even in private meetings I’ve been with him, he’s measured, he’s thoughtful,” said Huizenga.

Clayton has also refrained from ramming through an agenda with only Republican support , as some conservatives prefer. “

” Sometimes the majority in the majority only rolls the party in the minority, and it does not happen here, “said Chris Iacovella, President of the American Securities Association.” He is not a partisan operative. “

An important Question as Clayton has disagreed with his Republican colleagues is the surveillance of crypto curves.

The SEC chair has led to a breakdown on companies that offer investment and trade in digital tokens because of concerns, retailers can be invested in shame and market manipulation. [19659004] Earlier this year, he voted with the Democrats to reject a bitcoin-traded fund product, a decision by the Zuluaga of the Cato Institute as “most disappointing. “

Conservative consumers and many industry advocates demanded that Clayton would be more accommodating to the emerging digital token industry.

“Jay Clayton has shown the industry that he lives in an ivory tower with his opposition to approving filing applications for token offers. It’s frustrating, says Anthony Tu-Sekine, Chief of Blockchain and Cryptocurrency Group at Law Firm Seward & Kissel. [19659004] Clayton has also been slow on republican pet projects, opposed to Democrats, forcing shareholders to arbitrate and review rules that require companies to disclose if they use minerals from conflict-stricken parts of the world. In October, he called for political calls from President Trump to release quarterly reporting for 1958. “1960s

” How did we end up with this guy? “Said a lobbyist.” We can not get anything out of him. “

Some observers say that Clayton’s careful approach promises a productive 2019, and he may become more aggressive when Obama’s Democratic Commissioner Kara Stein comes out The SEC expects to move shareholders’ voting rules and give more clarity about crypto curves.

“I think many people would like things to move faster, but it’s the system,” said Paul Atkins, a former Republican SEC Commissioner, who advised the Trump Administration on the crew of financial supervisory authorities.

“In the New Year you see a lot of these seeds that he planted will begin to grow.”

Reporting by Katanga Johnson and Pete Schroeder; Editing Michelle Price and Tomasz Janowski

Our Standards: Thomson Reuters Trust Principles.

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