At Wednesday's confirmation hearings, SEC Chair nominee Jay Clayton said he will recuse himself from matters involving Sullivan & Cromwell, along with Barclays Bank, Deutsche Bank, Royal Bank of Canada, Ally Financial, Pershing Square, Paul Tudor Jones and other clients he's recently represented if confirmed as Chair of the SEC. [His confirmation hearing is scheduled for March 23.]

Which raises two issues.

ISSUE ONE.   Presuming that Clayton is confirmed, how quickly can (or will) the Trump administration fill the other 2 open Commissioner positions on the SEC? The 2 current Commissioners - Republican Michael Piwowar and Democrat Kara Stein - are often at loggerheads on on policy matters. Without a full complement of Commissioners - particularly when Clayton must recuse himself - deadlocks could become the norm rather than the exception. [Not to mention the absence of more diverse views on issues before the SEC.]

ISSUE TWO.    When Clayton says he will recuse himself on matters involving former Sullivan & Cromwell clients, is he referring to both DIRECT and INDIRECT matters? Direct matters - e.g., consideration of guilt or innocence and possible sanctions for, say, Barclays Bank - is an obvious instance for recusal. But what happens when the SEC considers revising a rule that principally applies to big banks and not necessarily impacts smaller banks? The opportunity is such cases to ease the financial and/or administrative burdens of big banks would seem to raise grounds for recusal.

It's uncertain that either issue will be addressed, but they should because they're relevant.