Republican Commissioner Elad Roisman will be acting chair of the Securities and Exchange Commission and though his time will be short, sources say his influence on pricing transparency in fixed income markets will be intensified.
President Donald Trump appointed Roisman late Monday to replace former SEC Chair Jay Clayton who left last week, cutting his term short.
"I am humbled and honored to serve as the acting chairman," Roisman said. "During the time I am in this role, I am fully committed to maintaining the steady course that Chairman Clayton charted during his admirable tenure. I look forward to continuing to work with the incredible SEC staff and my fellow commissioners as we steward this agency into the new year."
Roisman was sworn in as commissioner in 2018 and sources expect he will be acting chair for a few months before President-elect Joe Biden makes his pick for incoming SEC chair.
Before becoming commissioner, Roisman was chief counsel on the Senate Banking Committee. From 2012 to 2014, Roisman was counsel to
As counsel to Gallagher, Roisman has experience in analyzing the fixed income market, said Peter Chan, partner at Baker McKenzie and a former SEC enforcer.
“Both Gallagher and Roisman have expressed concern about the need to upgrade the trading of fixed income which includes municipal securities because of the opaqueness of the market,” Chan said.
Before joining the SEC, Roisman held positions as chief counsel at NYSE Euronext, which Chan said gives him an edge in market structure and technology.
“I suspect that he will continue to play a role in the discussion as to how to make the fixed income municipal securities market less opaque in terms of trading and pricing and potentially more liquid,” Chan said.
Roisman’s appointment to SEC acting chair magnifies his voice at the commission but is hampered by a small window of time to push forth any major initiatives, Chan said.
“Whatever influence there is will be limited by the amount of time, but I do think one view is that him being designated as acting chair is the recognition at least among certain political circles that his voice is important and it has some impact,” Chan said.
It would be difficult in a short amount of time to have a big impact on an organization like the SEC, said Fredric Weber, counsel at Norton Rose Fulbright.
“He would essentially be a lame duck you’d think,” Weber said.
Biden could select a new Democratic SEC chair in the interim, either Commissioners Allison Herren Lee or Caroline Crenshaw, when he takes office.
Notably, the commissioners are evenly split with two Democrats and two Republicans which could lead to split voting, though that's rare, said Paul Maco, counsel at Bracewell, who was the first Director of the SEC’s Office of Municipal Securities.
“The two-two split will not end until the confirmation and swearing-in of a Chairman nominated by President Biden and confirmed by the Senate,” Maco wrote in a column for the National Association of Bond Lawyers. “When that will be is hard to predict.”
That may depend on which party takes the Senate following two Georgia Senate run-offs in January, Maco said.
Biden has yet to pick a new SEC chair and sources say Roisman will not stay on.
