WASHINGTON Senators have narrowed a list of candidates to fill two Democratic commissioner seats at the Securities and Exchange Commission, a source familiar with the matter said on Friday.
Senate Majority Leader Harry Reid, a Nevada Democrat, will soon send recommendations to the White House for its consideration, the source said.
The SEC's five commissioners are nominated by the president and confirmed by the Senate. Because the two open SEC seats are allotted to the Democrats, congressional Democrats provide the White House recommendations for those positions.
The short list includes Elisse Walter, an executive vice president with the Financial Industry Regulatory Authority, and Luis Aguilar, a partner at law firm McKenna Long & Aldridge, according to sources.
Walter previously was the general counsel of the Commodity Futures Trading Commission and the deputy director of SEC's corporation finance division. Her name was put forward by New York Sen. Charles Schumer, sources say.
Aguilar served as the general counsel and executive vice president of Invesco, an institutional investment company, and also worked as a lawyer at the SEC. He has the backing of New Jersey Sen. Robert Menendez, according to sources.
"They have identified qualified candidates," the source familiar with the process said. "They have moved forward and certainly if they are not finalized are close to finalizing the names."
Walter and Aguilar could not be reached for comment.
Both Walter and Aguilar have tepid support from some parts of the investor community, which has been lobbying hard for a candidate who represents their views.
A third name, Damon Silvers, associate general counsel for the AFL-CIO labor federation, has been contacted by Senate Banking Committee members. Silvers is viewed as a long-shot nominee, according to sources.
The SEC has been operating with four commissioners since mid-September when Democrat Roel Campos left to join a law firm. The other Democrat, Annette Nazareth, has announced her resignation but has not set a departure date.
Depending on when Nazareth leaves and the new commissioners are appointed, the agency could be left with three Republicans at its helm -- Chairman Christopher Cox, Kathleen Casey and Paul Atkins.
However, the pressure is on to get the two Democrat seats filled before the end of the year with critical issues such as proxy access pending before the SEC.
Sen. Christopher Dodd and Rep. Barney Frank, chairmen of the Senate and House panels that oversee the SEC, have urged Cox to refrain from acting on major policy decisions without a full commission.
SEC watchers say it is not clear how quickly the nomination process will unfold.
"The White House is in no hurry," said John Coffee, a professor at Columbia Law School. "I've heard all kinds of names mentioned."
(Reporting by Rachelle Younglai; Editing by Tim Dobbyn)