Trump signs new executive order: Independent government agencies, including the SEC, must obtain White House approval before formulating new regulations

According to the Zhitong Finance APP, on Wednesday, U.S. President Trump signed a new executive order requiring independent government agencies, including the U.S. Securities and Exchange Commission (SEC), to obtain approval from the White House before formulating new regulations.

This move is the latest action by the Trump administration to control the power of federal agencies and is part of its overall deregulation policy. Meanwhile, the government efficiency department led by Musk is also advancing plans to reduce the size of government.

Under this executive order, all government agencies must submit proposals for new regulations to the White House for review before formulating them. There are no exceptions provided for agencies traditionally enjoying independent decision-making authority, such as the SEC and the Federal Communications Commission (FCC). This means that even these agencies must obtain approval from the White House before issuing new rules.

However, the only agency explicitly exempted from the executive order is the Federal Reserve, whose monetary policy decisions remain unaffected by this order.

Although the statement released by the White House did not mention direct restrictions on enforcement actions, there is widespread belief that this order may increase the risk of political interference in enforcement authority. For example, reports indicate that SEC enforcement lawyers are required to obtain approval from the agency's politically appointed leaders before initiating formal investigations. This requirement is a restoration of the SEC's earlier enforcement process, which was modified to strengthen regulation after the Bernie Madoff Ponzi scheme was exposed.

While the executive order does not explicitly grant the White House direct oversight of enforcement activities, the overall authority it establishes may influence these actions.

John Bergmayer, legal director of the consumer advocacy organization Public Knowledge, stated: "The stance of the executive order is that independent agencies are not truly independent but are completely under the control of the White House. Therefore, the government may believe that the president has the authority to control and guide enforcement actions."

Additionally, the executive order stipulates that the Office of Management and Budget (OMB) will oversee the funding of independent agencies and requires these agencies to consult with the White House when formulating strategic plans, with the White House setting their performance standards.

Bergmayer believes that enforcement actions may not become part of the routine agency review mandated by the executive order, but the White House's comprehensive control over their overall operations may still impact enforcement.

Igor Rozenblit, managing partner of regulatory consulting firm Iron Road Partners, pointed out that the White House plans to more closely monitor agencies' strategic plans and priorities, which may involve intervention in enforcement methods. "More importantly, this indicates that there may be ongoing dialogue between the SEC and the White House, which could open the door for White House intervention in specific enforcement matters."

The White House stated that the executive order aims to strengthen accountability mechanisms for agencies and control their ability to issue regulations. The White House's statement noted that regulations formulated by government agencies "involve billions of dollars in costs and affect some of the most controversial policy issues."

However, Bergmayer disagreed, arguing that the claim of independent agencies lacking accountability mechanisms is "essentially absurd." "These agencies—just as the president should—regularly report to Congress." Congress controls their budgets and has the authority to overturn their decisions. In addition, independent agencies must adhere to the strict provisions of the Administrative Procedure Act when formulating regulations, and their regulations and actions are often challenged in court or even by Congress