% SEC Policy Update: Coordinated Review of Settlements and Waivers Restored

By Braeden Anderson

On September 26, 2025, Chairman Paul S. Atkins of the U.S. Securities and Exchange Commission (SEC) announced that the Commission will restore its prior practice of simultaneous consideration of settlement offers and related waiver requests in enforcement actions. The policy change reverses a 2021 decision under prior leadership that had required waiver requests to be considered separately, only after a settlement was finalized.

According to Chairman Atkins, reinstating this procedure will enable the Commission to more effectively carry out its three-part mission (protecting investors, facilitating capital formation, and maintaining fair, orderly, and efficient markets) by enhancing procedural efficiency, fairness, and inter-divisional coordination.¹

Background: Waivers and Collateral Consequences

Certain SEC enforcement actions trigger automatic statutory or regulatory disqualifications that carry significant collateral effects for regulated entities. These disqualifications may result in:

Loss of Well-Known Seasoned Issuer (WKSI) status for purposes of registered offerings;
Loss of statutory safe harbors for forward-looking statements under the Private Securities Litigation Reform Act of 1995 (PSLRA);
Ineligibility for private offering exemptions under Regulations A, D, and Crowdfunding pursuant to the Securities Act of 1933;
Loss of exemptions for securities issued by small business investment companies or business development companies under Regulation E; and
Disqualification from serving in certain capacities pursuant to Section 9(a) of the Investment Company Act of 1940.²

Entities affected by these collateral consequences may submit waiver requests asking the Commission to exempt them from such disqualifications. Historically, the SEC allowed parties to present these waiver requests simultaneously with their proposed settlement offers. This practice enabled the Commission to assess both the enforcement resolution and its collateral effects together, promoting a coordinated and comprehensive decision-making process.

That practice was formalized under Chairman Jay Clayton in July 2019, when he issued a statement confirming that the Commission could consider settlement offers and related waivers at the same time.³ However, in February 2021, Acting Chair Allison Herren Lee announced her intent to adopt a different process, separating the review of waivers from the settlement itself.⁴ The 2025 statement by Chairman Atkins restores the earlier, unified approach.

Chairman Atkins’ 2025 Statement

Chairman Atkins’s Statement on Simultaneous Commission Consideration of Settlement Offers and Related Waiver Requests makes clear that this policy change represents a return to the Commission’s historical practice.⁵ In consultation with the Divisions of Enforcement, Corporation Finance, and Investment Management, the Chairman determined that permitting simultaneous consideration of settlements and waivers best serves the Commission’s mission.

Under the restored procedure, when a settling entity submits an offer of settlement accompanied by a contemporaneous waiver request, the staff will present both items to the Commission for simultaneous consideration.⁶ This will allow the Commission to evaluate the proposed settlement and the related waiver within the same factual and legal context (taking into account the relevant conduct, consequences, and recommendations of each Division).

According to Chairman Atkins, this process will “enable the Commission to consider both the proposed settlement and waiver request together… to assess whether the proposed resolution of the matter in its entirety achieves the Commission’s three-part mission.”⁷ The Chairman emphasized that the approach will promote efficiency and certainty, conserve Commission resources, and avoid “siloed internal consideration” that can hinder comprehensive resolution.

Procedural Framework

The reinstated process does not bind the Commission to accept any simultaneous proposal. The Commission may still elect to evaluate a settlement and waiver separately.⁸

Chairman Atkins also described the procedure to be followed when the Commission accepts a settlement offer but declines to approve the associated waiver request:

The staff will promptly notify the settling party of the Commission’s decision;
The settling party must notify the staff, typically within five business days, whether it wishes to proceed with the accepted settlement; and
If the party declines or withdraws, the negotiated settlement terms may no longer be available, and the matter may proceed to litigation.⁹

This structure ensures that parties retain the ability to evaluate their positions in light of the Commission’s determination, while maintaining procedural clarity for both the SEC and the respondent.

Expected Benefits and Continuing Safeguards

Chairman Atkins stated his belief that reinstating this practice “will benefit investors, the capital markets, and the Commission’s processes more broadly.”¹⁰

The expected benefits include:

Enhanced efficiency and predictability in the settlement process;
Comprehensive evaluation of the enforcement action and related disqualifications; and
Reduced administrative burden by avoiding sequential, duplicative reviews.

The Chairman also emphasized that the rigor of the policy divisions’ waiver analyses will remain unchanged. The divisions will continue to evaluate whether a waiver is warranted under the applicable standards and consistent with investor protection, market integrity, and the public interest.¹¹

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For additional context, the Chairman referenced prior authoritative materials discussing the waiver process, including the amicus brief of former Chairman Harvey L. Pitt in SEC v. Citigroup Global Markets, Inc.¹² and Chair Mary Jo White’s 2015 statement, “Understanding Disqualifications, Exemptions and Waivers Under the Federal Securities Laws.”¹³

Conclusion

By reinstating the practice of simultaneous Commission consideration of settlement offers and related waiver requests, the SEC has returned to a procedural approach that aligns fairness, efficiency, and comprehensive oversight. The decision restores inter-divisional coordination and ensures that enforcement resolutions are evaluated in light of their full regulatory implications.

The Commission’s ability to review settlement offers and waiver requests concurrently (while preserving discretion to separate the two when appropriate) represents a balance between procedural pragmatism and strict oversight. As Chairman Atkins observed, this restoration “will benefit investors, the capital markets, and the Commission’s processes more broadly.”

Statement on Simultaneous Commission Consideration of Settlement Offers and Related Waiver Requests, Chairman Paul S. Atkins, U.S. Securities and Exchange Commission (Sept. 26, 2025).
Id. at n.1.
Statement Regarding Offers of Settlement, Chairman Jay Clayton, U.S. Securities and Exchange Commission (July 3, 2019), available at https://www.sec.gov/newsroom/speeches-statements/clayton-statement-regarding-offers-settlement.
Statement on Contingent Settlement Offers, Acting Chair Allison Herren Lee, U.S. Securities and Exchange Commission (Feb. 11, 2021), available at https://www.sec.gov/newsroom/speeches-statements/lee-statement-contingent-settlement-offers-021121.
Atkins, supra note 1.
Id.
Id.
Id.
Id.
Id.
Id. at n.3.
Brief for Harvey L. Pitt, Amicus Curiae, SEC v. Citigroup Global Markets, Inc., 752 F.3d 285 (2d Cir. 2014).
Chair Mary Jo White, Understanding Disqualifications, Exemptions and Waivers Under the Federal Securities Laws, U.S. Securities and Exchange Commission (Mar. 12, 2015), available at https://www.sec.gov/newsroom/speeches-statements/031215-spch-cmjw.