WASHINGTON (Reuters) - Officials from the U.S. Securities and Exchange Commission on Friday laid out the agency’s policy and enforcement priorities at the annual Practicing Law Institute’s SEC Speaks conference.
The agency is currently juggling a massive agenda that includes rulemaking called for in the 2010 Dodd-Frank financial oversight law, possible market structure changes, and a push to bring financial crisis cases, among other things.
In addition, SEC Chairman Mary Schapiro is trying to make progress on other areas, from possible reforms for money market funds to negotiations with foreign regulators on converging accounting standards.
Here are some highlights from SEC officials’ comments at SEC Speaks:
ON SCHAPIRO’S PUSH FOR A SECOND ROUND OF REFORMS TO MONEY MARKET FUNDS:
“Money market funds remain susceptible to runs and to a sudden deterioration in quality of holdings. We need to move forward with some concrete ideas to address these structural risks.”
“There are two serious options we are considering for addressing the core structural weakness: first, float the net asset value; and second, impose capital requirements, combined with limitations or fees on redemptions.”
“To the extent that there’s a deadline, it’s the pressure that we should feel from living on borrowed time.”
SCHAPIRO ON THE SEC MOVING TOWARD ADOPTING A CONSOLIDATED AUDIT TRAIL:
“The complexity of the undertaking, however, has necessitated a detailed and extended rulemaking process, including a thoughtful review of the many comments received since we first proposed the system’s creation. The contours of the regulation are being finalized and will be considered by the full commission.”
“While the initial proposal will be for an audit trail tracking orders and trades in the equity markets, I believe that the system should eventually be expanded to include fixed income, futures and other markets.”
“It is important that we get a structure in place sooner rather than later so that the heavy lifting of working through the technical nuances of the system can begin. We expect to adopt a final rule in the months ahead. After that, I anticipate that the exchanges and FINRA (Financial Industry Regulatory Authority) will be required to submit a detailed blueprint, which in turn would be subject to public comment and a separate Commission approval.”
SCHAPIRO ON THE SEC’S TRACK RECORD ON FINANCIAL CRISIS CASES:
“In the area of financial crisis-related cases, we filed charges against nearly 100 individuals and entities - actions against Goldman Sachs, Citigroup, J.P. Morgan and top executives at Countrywide, Fannie Mae and Freddie Mac. And more than half of the individuals charged were CEOs, CFOs or other senior officers.”
“It should come as no surprise that there are more actions to come.”
SEC REPUBLICAN COMMISSIONER TROY PAREDES ON THE VOLCKER RULE:
“There is a considerable risk that, as proposed, the regulatory infrastructure to implement the Volcker Rule could unduly impede the competitiveness and dynamism of our financial markets and hinder the flow of capital to its most productive purposes at the expense of our country’s economic growth.”
“My present view is that the most appropriate path forward from here would be a reproposal - a fresh start, if you will.”
SCHAPIRO ON COMPANIES’ POLITICAL SPENDING DISCLOSURES:
“Companies that receive a shareholder proposal asking them for disclosure about political contributions have been required to put those shareholder proposals in the proxy, so there is a mechanism for shareholders to directly represent to the companies they own to have that issue put forward for a shareholder vote.”
SEC DEMOCRATIC COMMISSIONER LUIS AGUILAR CALLING FOR A REQUIREMENT THAT PUBLIC COMPANIES DISCLOSE POLITICAL SPENDING:
“Requiring transparency for corporate political expenditures cannot wait a decade.”
“It is the commission’s responsibility to rectify this gap and ensure that investors are not left in the dark while their money is used without their knowledge or consent.”
Reporting By Sarah N. Lynch; Editing by Tim Dobbyn