William Donaldson announced today that he is stepping down as chairman of the U.S. Securities and Exchange Commission at the end of June.

Donaldson, a former Wall Street executive, was appointed back in 2003. In recent months, he has repeatedly butted heads with the other two Republican commissioners at the SEC, siding with the Democrats on important issues such as whether hedge funds should be required to register, extending the trade-through rule, and requiring mutual fund boards to have independent chairs.

However, at a press conference, Donaldson denied that these internal conflicts, or criticism he faced from the business community pushing back against increased regulatory attention, has anything to do with his decision. He stressed that 99% of the commission’s decisions on his watch have been unanimous. That said, he defended his position in the contentious high-profile decisions, and said he hoped there’ll be no legalistic rollback of these moves.

Donaldson also defended the Sarbanes-Oxley Act, particularly the controversial internal control reporting provision, known as SOX 404. Donaldson allowed that there are legitimate concerns about the initial implementation of 404, and that the SEC is looking to improve that. However, he stressed that the SOX reforms are justified and are having their intended effect.

As for the official reason for his departure, in a statement, Donaldson said, “I have been honoured to serve as chairman. Although there will always be more work to be done to preserve and enhance the integrity and strength of our nation’s corporations and markets, I believe the time has come for me to step down and return to the private sector and my family.”

He added that when he took over at the SEC, public confidence in the markets was severely undermined, “reflecting the corporate and financial scandals that had shaken the nation”.

“Thanks to the dedicated efforts of the many professionals who serve at the SEC, this period has represented an extraordinarily active and effective time for the agency. It may well be remembered as the most consequential and productive period in the commission’s history since its founding in 1934,” he added.

Donaldson suggested that “there’s still work to be done” in repairing corporate America’s reputation. And, he indicated that he expects more attention from the SEC to executive compensation disclosure, and overdue Securities Act reforms, among other things.

“Chairman Donaldson has been a thoughtful, pragmatic leader who helped to restore the pre-eminence and stature of the SEC,” said Securities Industry Association president Marc Lackritz in response to the news. “He came to the SEC at a crucial time in its history, and leaves the commission and investors in better shape than when he found them. We appreciate his service to investors and our nation and wish him well.

“We look forward to working with Chairman Donaldson’s successor to help the SEC strike the right balance between effective protection for investors and efficient regulation for the industry.”

Industry players commented freely on the resignation.

In a statement, Bob Greifeld, president and chief executive officer of the Nasdaq Stock Market Inc., said, “Chairman Donaldson has provided visionary leadership through a time of critical change for American business and the U.S. financial markets — and investors have benefited. The Chairman’s initiatives to modernize the stock markets and regulation have helped to ensure the vitality of our markets and U.S. competitiveness.”

“As chairman of the U.S. Securities and Exchange Commission, William Donaldson has been a champion of investors and has successfully led the drive to restore confidence in U.S. financial markets and corporate America,” said NYSE CEO John Thain.

“Amid great challenge and change, he successfully applied his experience, vision and commitment to integrity and innovation to produce landmark reforms in governance and ethics, strengthen the structure and competitive position of American’s markets, and greatly increase the SEC’s ability to effectively address the needs of the investing public.”

One of the Republican commissioners that Donaldson clashed with, Cynthia Glassman, issued a statement too, saying, “Chairman Donaldson joined the agency during a challenging period, bringing great stature to the office. Throughout his tenure, his commitment to the protection of investors has been unwavering. It has been a privilege to work with him, and I wish him every success in the future.”