Democrats don't want SEC to act with vacancies

By John Poirier

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission should not make any major policy decisions while its two Democratic seats are vacant, the Democratic chairmen of the Senate Banking Committee and the House Financial Services Committee said on Wednesday.

Sen. Christopher Dodd of Connecticut told reporters that nominees to replace Democrats Roel Campos, who has already left the SEC, and Annette Nazareth, who plans to leave soon, have not yet been determined.

A source familiar with the matter said Nazareth is expected to leave the federal agency after January 1.

"Yes," Dodd said when asked if he is concerned. "I don't think they should be making any decisions at the moment."

House Financial Services Committee Chairman Barney Frank told Reuters he shared Dodd's concerns.

If the Democrats are not replaced before Nazareth leaves, SEC Chairman Christopher Cox would chair a commission with only his two fellow Republicans -- Paul Atkins and Kathleen Casey -- remaining.

SEC spokesman John Nester declined to discuss what he called a "hypothetical situation," noting that currently there is only one vacancy. He said he was unaware of expectation there would be two vacancies before one or both of the seats were filled.

It is not clear whether the Democratic commissioners will be replaced before the SEC is expected to face its next big policy issue, a November vote on whether shareholders can nominate directors to a company's board. Earlier this year, the commission split along party lines to propose two approaches.