In an interview, Aguilar described his relationship to other commissioners as “collegial” and said it will be up to Walter to set the agenda.

“We certainly have different thoughts about how certain things should move forward, but we are in communication,” Aguilar said.

It's not just the commission that may find itself at sea. Three of Schapiro's top lieutenants are leaving as well — Meredith Cross of the public disclosures unit, Robert Cook of the markets division, and General Counsel Mark Cahn — leaving those key rulemaking offices with uncertain leadership.

Among the most prominent financial-industry rules still under construction is the Volcker rule to restrict banks from trading with their own money, potentially endangering depositors. The SEC is writing this Dodd-Frank Act rule along with four other regulators.

“I can't imagine the Volcker rule that could get through the 2-2 split commission that would satisfy the requirements of the law,” Roper said. “That one seems particularly tough.”

Schapiro told reporters in October that the regulators have “some differences of opinion about how to approach some particular issues.” Gallagher and Paredes both called for Volcker to be put back on the drawing board.

Even if those differences end soon and regulators agree on a rule, the SEC may need several months to examine the costs and benefits before a final vote. The process to weigh each rule's impacts has become more intensive after the U.S. Court of Appeals tossed out an SEC rule last year, saying the agency failed to conduct a proper assessment.

JOBS Act

More recent is this year's Republican-backed Jumpstart Our Business Startups Act, which passed Congress with support from both parties but now faces resistance from Democrats calling for more investor protections.

One provision throws out the ban against hedge funds advertising for investors. Schapiro first intended to put the rule on a fast track, according to internal e-mails published last week by the House Oversight and Government Reform Committee. She was swayed by protests from consumer groups and said she didn't “want to be tagged with an Anti-Investor legacy.” Gallagher said in an e-mail he was “furious” Schapiro changed her mind.

When the rule was eventually proposed in August, Aguilar voted no, but the rest of the commission voted yes. Walter said at the time that she had some objections to the proposal and favored tougher disclosures to make the rule safer for investors. The process will now be hers to direct.

Tom Quaadman, vice president of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, said his group is eager to see provisions of the JOBS Act finished.

“It may be that some of this stuff is intentionally being slow-walked,” Quaadman said.

A slower approach is fine for other rules, he added, including those regulating the SEC's share of the $639 trillion global swaps market. The CFTC oversees the bulk of the market and has outpaced the SEC in writing regulations. The SEC still has several rules to finish for its oversight of security-based swaps, which includes some of the kind of credit-default swaps that helped fuel the 2008 financial crisis.

“It may be in everyone's interest that it takes a little longer to get something done,” Quaadman said.

Pace Slowed

Law firm Davis Polk & Wardwell LLP has been tracking Dodd-Frank progress, and its latest report last week shows the SEC has finalized just 32 of the 95 rules the 2010 law required. In the first year after the law was enacted, the agency averaged nine votes a month to propose or adopt rules. The pace slowed by about half after the federal-court rejection of a rule for insufficient cost-benefit analysis.

Now vulnerable to similar challenges, the SEC redoubled efforts to study cost-benefit effects. In the last 12 months, the agency has proposed nine rules and finalized 22, including routine administrative actions. It's been more than three months since the SEC adopted a Dodd-Frank rule.

John Nester, an SEC spokesman, declined to comment on how leadership changes could affect specific rulemaking efforts.

“The commission and staff are working hard, as we've stated before, to write effective rules as quickly as possible – - with the emphasis on effective,” he said.

Ira Hammerman, general counsel for the Securities Industry and Financial Markets Association, is optimistic that rules such as swaps regulation and Volcker — those already under lengthy discussion and legally mandated — can be finished by the commissioners.

“They will rise above and find a way to regulate in the areas that are already on the table,” he said in an interview.

Roper said the Republican Party has made it clear it aims to counter the 2010 financial overhaul through inaction.

“On Dodd-Frank, they can just say no, and that works for them,” she said. “Clearly, the broader Republican agenda since the 2010 election has been to prevent the effective implementation of Dodd-Frank.”

The agency has yet to propose some Dodd-Frank rules on executive pay — one for clawing back bonus money from executives when their companies have to restate earnings and one that reports the ratio between the pay of each public company's chief executive and its median employee. The regulator has likewise failed to propose a new standard for brokers dealing with retail clients — a fiduciary duty parallel to one for investment advisers.

2008 Crisis

Some of the SEC's delayed rules strike at the root of the 2008 crisis, including one banning firms from designing asset-backed securities deals that put their interests in conflict with investors. The SEC didn't propose the rule until September 2011, five months after the law said it should be adopted. The comment period was extended twice, and the commission hasn't yet scheduled a final vote.

“Mary Schapiro's leaving with a lot of the hard rules still to be written,” Quaadman said. “Unfortunately, I think the dynamics are shaping up that things are going to move at a snail's pace.”

One contentious effort that Schapiro sought as a legacy — overhauling money market mutual funds — failed during her tenure but may move forward after she's gone.

The SEC released a study this week on the effects of 2010 changes to industry regulations, research conducted at the request of Aguilar and the two Republican commissioners that could lay the groundwork for a new proposal. The study found that while funds are “more resilient now to both portfolio losses and investor redemptions than they were in 2008,” the rule changes wouldn't have prevented the 2008 collapse of the Reserve Primary Fund that led to an industry run.

“The study indicates that the 2010 amendments weren't enough,” Aguilar said. He said it “may be appropriate to consider the various proposals through the prism of the new information.”

In retrospect, Schapiro told Bloomberg Businessweek she “hadn't anticipated all the hurdles to moving quickly” when she took the job.

“We got a lot done in Dodd-Frank,” she said, “but many of the time frames that were built into the law were unrealistic.”

Bloomberg News

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