4 Min Read
By Sarah N. Lynch
WASHINGTON, Dec 5 (Reuters) - The U.S. Securities and Exchange Commission's voting on whether to adopt the Volcker rule to ban proprietary trading by banks, will likely be done behind closed doors rather than in a public meeting, SEC Chair Mary Jo White said on Thursday.
Speaking with reporters on the sidelines of an event at SEC headquarters, White said she expects to carry out the vote behind closed doors in a process known as "seriatim."
Many of the other regulators working on the rule with the SEC, by contrast, plan to vote on the Volcker rule in open public forums on Dec. 10.
People familiar with the matter previously told Reuters the SEC has been grappling with scheduling problems, as two SEC commissioners will be traveling next week.
Republican Commissioner Michael Piwowar is due to give a speech in London on Monday at a conference being held by the Investment Company Institute, a major mutual fund trade group.
The SEC's other Republican member, Daniel Gallagher, will be traveling next week throughout Germany and other parts of Europe next week.
The SEC had given thought to holding a public meeting on Dec. 18, two people previously told Reuters.
But earlier this week, White told reporters she was hoping to vote on the rule on or about the same time as the other regulators involved.
Those regulators are the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Commodity Futures Trading Commission.
"In order to essentially coordinate with the other regulators timing wise... and to make sure all of our commissioners have an opportunity to vote and comment on the rule, I think we are going to proceed seriatim," White said in response to a question from Reuters on Thursday.
The SEC is not legally required to hold a public meeting to vote on rules, nor is it required under the 2010 Dodd-Frank Wall Street reform law to vote at the same time as the four other regulators working on the rule.
Both the SEC and CFTC are also not technically required to adopt the same version of the Volcker rule as the banking regulators, though all of the regulators are striving for uniformity in both the content and timing of the voting.
Still, the decision not to seek a public hearing and debate on the final version of the Volcker rule could irk the industry and proponents of the rule who have been tracking its progress for two years.
It has become customary practice for the SEC and other regulators, particularly in the wake of the 2007-2009 financial crisis, to conduct public votes on rules that are highly controversial or critical to the markets.
The Volcker rule has proven to be among the most contentious provisions in the Dodd-Frank law.
Not only have banks staunchly opposed the Volcker rule, but there has also been a great deal of haggling among the five regulators over how strict it should be and where they should draw the line between legitimate market-making activities versus proprietary trading.
This has been a particularly delicate issue for the SEC, the regulator with the most experience in the area of overseeing market-making activities.