By Robert Schmidt and Ben Bain
(Bloomberg) --The Trump administration is set to release its blueprint for overhauling regulation of U.S. markets, an expansive list of priorities that touches on the stock, bond and derivatives trading that fuels Walls Street profits.
The report, being prepared by the Treasury Department, could come as early as Friday, according to people familiar with the matter. Rather than making specific demands, the document is meant to be a road map for agencies as they streamline rules, the people said.
While some of the changes would require congressional action, most could be accomplished by re-writing regulations, said the people, who requested anonymity because the study hasn’t been released.
The markets review was spurred by President Donald Trump’s February executive order calling for a broad rethink of financial regulations. Treasury issued a separate report on bank oversight reforms in June, and another on asset managers is set to be released in the coming days.
While many of the suggestions in the markets study are likely to be embraced by the financial industry, Democratic lawmakers and investor advocates are expected to oppose the recommendations. They’ve been critical of the Republican administration’s attempts to cut Wall Street regulations, especially those enacted in response to the financial crisis.
Still, the report won’t seek a wholesale rollback. Instead, it will propose adjustments to rules stemming from two laws that tightened capital markets oversight, the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010.
Two Trump appointees, Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman Chris Giancarlo, will be charged with carrying out many of the recommendations, the people said.
Both agencies saw their oversight roles expanded by Dodd-Frank, with the CFTC being given responsibility for policing the massive over-the-counter derivatives market. The two chairmen appointed by Trump are aligned with the administration’s goal of dialing back some of those rules.
Clayton told lawmakers in March that he thought Dodd-Frank regulations should be reviewed to determine “whether they are achieving their objectives effectively.” And he has repeatedly said that he wants to stem a two-decade decline in the number of publicly traded U.S. companies -- a subject the Treasury report will address.
Giancarlo reached out to the derivatives industry earlier this year for suggestions on how the CFTC could simplify and modernize agency rules that he said can be “unnecessarily complex.”
The report’s suggestions for the CFTC include changes to margin requirements, an easing of rules governing swaps’ trading venues and coordinating U.S. regulations with overseas jurisdictions, the people said.
The Treasury also plans to recommend that the CFTC and SEC work better together, particularly in monitoring derivatives markets. The report will likely make recommendations on each agency’s jurisdiction in that area, according to the people.
On the international front, the report will address the U.S. role in setting global regulatory standards, they said.
Craig Phillips, a former BlackRock Inc. executive who was major fundraiser for Hillary Clinton’s presidential campaign, has been leading the Treasury’s regulatory review. He is now a senior adviser to Secretary Steven Mnuchin.
Spokesmen for Treasury, the SEC and the CFTC declined to comment or couldn’t be reached.
To contact the reporters on this story: Robert Schmidt in Washington at [email protected] ;Ben Bain in Washington at [email protected] To contact the editors responsible for this story: Jesse Westbrook at [email protected] Gregory Mott