Still, investor advocates believe, the SEC under Chairman William Donaldson -- who may be staying in the job into the second Bush term -- would continue to be more activist than normally would have been expected in a Republican administration.

Donaldson, a former investment banker and New York Stock Exchange chairman, was brought in by President George W. Bush in early 2003 to revitalize an agency that was smarting from the political missteps of then-chairman Harvey Pitt and criticized as ineffective in fighting financial crime.

He has shown toughness as a regulator and reformer, crossing party lines to vote with the two Democratic commissioners on the five-member panel and inciting opposition from business interests vested in the status quo.

"If Donaldson is staying, that's very good news for investors," said Barbara Roper, director of investor protection for Consumer Federation of America.

Roper and other observers note that Donaldson apparently hasn't softened his stance to secure his job.

At the same time, however, dissension from Donaldson's two fellow Republicans on the panel recently has sharpened; a new internal flashpoint has been the issue of whether heavy fines imposed on miscreant companies are an effective crime deterrent or actually hurt shareholders. Pressure from the business community has escalated into lawsuits and one of Donaldson's two Democratic allies has announced that he is leaving.

Bush took his first step Monday in reshaping his economic team for the second term, naming Kellogg Co. CEO Carlos Gutierrez as Commerce secretary. The White House has offered no promise of job security to Treasury Secretary John Snow, who has made it clear that he wants to stay. Stephen Friedman, Bush's chief economic adviser, has announced his resignation.

There have been no perceptible rumblings, though, of a move to replace Donaldson, a Bush family friend. Donaldson has said, with typical Washington opacity, "I serve at the pleasure of the president. Having said that, I also serve at my own pleasure. And by that I mean, I believe that there are a number of things we're working on, a number of things I know we're accomplishing, and as long as we're accomplishing those things, that's pleasing."

Indeed, in the 21 months or so of Donaldson's tenure, the SEC has rolled out new rules at breakneck speed. First there was a stream of actions putting teeth into the sweeping law to combat corporate fraud enacted in July 2002 at the height of the accounting scandals - which also nearly doubled the SEC's budget.

Then, after revelations surfaced in September 2003 of improper trading practices throughout the $7 trillion (euro5.26 trillion) mutual fund industry that disadvantage ordinary shareholders, the SEC unleashed another series of new rules. The most controversial, mandating that the chairmen of mutual fund boards be independent from the companies managing the funds, has been challenged in federal court by the U.S. Chamber of Commerce.

The boards of an estimated 80 percent of U.S. mutual funds -- some 3,700 of them -- will be forced to replace their chairmen when the rule takes effect late next year.

"The SEC is under a litigation attack from the business community," said John Coffee, a professor and expert on securities law at Columbia University Law School in New York.

Another sensitive move by the agency, bringing hedge funds under its supervision, has sparked objections from Federal Reserve Chairman Alan Greenspan and Snow, the Treasury chief, as well as hints of legal challenges from industry opponents.

Some observers interpret other recent actions as signs of retreat or slowdown by the agency in the face of massed opposition from business interests:

• A proposal to make companies more accountable by opening their official ballots to big shareholders who want to nominate board directors, which Donaldson first brought forward in July 2003, remains stalled for lack of a compromise among the five commissioners.
  
  The stalemate is "an indication that powerful corporate interests can influence policy," said Consumer Federation's Roper.
  
  
• On Tuesday, the SEC announced that it will postpone a final decision on overhauling the structure of U.S. stock markets and how stocks are traded, opening the proposal to additional public comment. Stock exchanges, professional traders and other Wall Street players had voiced objections.
  
  
• In another move Tuesday, the agency gave more than 2,000 smaller public companies an additional 45 days to complete the first-ever required reports on the strength of their internal financial controls. Smaller companies have been the most vocal about what they say are the burdens and expense of new reporting requirements that came in with the 2002 corporate fraud law.