Many moons ago, when I was a law clerk, the judge I served was fond of analogizing his clerks to hunting dogs. He directed us to stay focused on the issues presented by a case and not to be distracted by things outside the questions the court was asked to answer. In his words, his clerks needed to hunt big game and “avoid the rabbit trails.” That’s advice the Securities and Exchange Commission (SEC) has failed to heed over the past four years.

The SEC is fond of citing its three-part mission of “protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.” But instead of focusing on that mission, the SEC has stretched beyond its authority in multiple directions, establishing itself as an environmental regulator and implementing a de facto ban on much of the digital assets ecosystem. The SEC also considered rule proposals that would have placed significant roadblocks to investor participation in the markets and ignored capital formation entirely. It’s time for the SEC to get back on mission.

President-elect Donald Trump’s pick to run the SEC, Paul Atkins, has his work cut out for him to bring the SEC in line. But the first step is perhaps the easiest: ending the SEC’s side quests that stretch the agency beyond its statutory authority.

Two notable examples of this are the SEC’s climate-risk disclosure rule (under legal challenge in federal court) and the SEC’s much-maligned approach to digital assets. The climate-risk disclosure rule creates a burdensome separate disclosure regime for climate-related information, mandating disclosures that extend far beyond the SEC’s statutory authority. And the SEC’s approach to digital assets — including jurisdictional grabs and aggressive enforcement tactics — has usurped Congress’s authority by operating as a de facto prohibition on U.S. crypto activity.

These high-profile examples are not the only ones. Indeed, courts have struck down recent rules on private fund adviser regulation and the definition of a “dealer” as exceeding the SEC’s statutory authority. In a world where administrative agencies are entitled to less judicial deference on interpretations of statutory authority, the SEC must assiduously stay within the boundaries Congress granted to it — and stay off the rabbit trails.

The second step to getting the SEC back on mission may be a bit trickier: fixing what is broken. In recent years, the SEC has done a poor job at this, seeking to enact major reform to parts of the securities markets that largely function well. For example, the predictive data analytics rule proposal broadly targeted financial services firms’ use of technology, ignoring the beneficial role of technology in making investing more accessible to a broader range of investors. The equity market structure rule proposal would have similarly harmed individual investors who have enjoyed decreased costs through the current market structure.

Instead, the SEC should focus on fixing what is actually broken. Regulation should be focused on market failures, not on a desire to control investors’ decisions or the flow of capital. And the agency’s thinking must be informed by good economic analysis that takes into account the full costs of a rule weighed against non-speculative benefits, including the impact of interconnected proposals on each other. Chief candidates for the agency’s attention are 1) designing clear rules of the road for the crypto industry and 2) improving the rules that govern capital formation — smoothing the pathways for small businesses to raise capital and for growing businesses to access the public markets.

The SEC also needs to work on fixing its broken reputation with market participants and the courts. The SEC’s enforcement-centric approach — which was not limited to crypto — has produced less certain and less clear rules for market participants. Enforcement actions may provide examples — often light on relevant details — about what not to do, but they rarely provide clear guidance for understanding what to do.

When an enforcement-first mindset is coupled with a strained relationship characterized by “stilted communication, half-hearted engagement … and limited transparency,” as Commissioner Hester Peirce put it, it’s easy to see how market participants’ trust in the regulator may falter. That lack of trust not only results in worse regulation — at times asking regulated entities to comply with rules that the agency itself would struggle with — but it also increases the burdens on the SEC, which has increasingly had to defend against offensive litigation from market participants seeking clarification of the agency’s rules.

The SEC’s reputation with the courts also needs mending. Courts have found the SEC to have acted “arbitrarily and capriciously” or otherwise exceeded its statutory authority multiple times in recent years, and the SEC was sanctioned for misconduct by a federal district court in an enforcement matter. With a federal judiciary exercising additional scrutiny over administrative agency decision-making in light of recent Supreme Court decisions, the SEC must return to the straight and narrow to effectively carry out its statutory mandate.

Bringing the SEC’s focus back to its mission is no easy (or small) task, but it must be done to ensure regulation within the bounds that Congress intended. The best path is to follow my judge’s advice and stay off the rabbit trails.