WASHINGTON (Reuters) - The top U.S. securities regulator said regulatory rule-writing should not be used to re-debate the financial reforms Congress just passed, but pledged an open process.
U.S. Securities and Exchange Commission Chairman Mary Schapiro told a Chamber of Commerce event on Tuesday that the SEC will be seeking public comment, even before it formally puts out proposals on topics such as over-the-counter derivatives, and fiduciary standards for brokers.
Schapiro struck a cooperative tone with the chamber, which spent millions of dollars to fight Democrats as they debated the tougher financial regulations that were signed into law last week as the Dodd-Frank Act.
But she warned against efforts to undermine the legislation.
“We must move forward,” Schapiro said. “The regulatory process is not designed to re-debate issues that Congress has resolved.”
The audience peppered Schapiro with technical and polite questions after her prepared remarks.
David Hirschmann, president of the Chamber’s Center for Capital Markets Competitiveness, praised Schapiro’s work heading up the reinvigorated SEC, saying she should be “cloned.”
Steve Bartlett, head of the trade group Financial Services Roundtable, took on a tone of resignation. Speaking on a panel after Schapiro, he said the financial world has to adjust to a new reality.
“There will clearly be some things that many in the industry think, ‘Well that is just dumb.’ Dumb or not, that is the reality,” Bartlett said.
Schapiro tried to appeal to the business audience on a key midterm election issue — the economy — by describing the Dodd-Frank Act as a catalyst for growth.
“I believe the act, especially when fully implemented, will bring us closer to a goal we all share: namely, more stable financial markets that better protect investors and facilitate the capital formation on which our workers, investors, companies and economic growth rely,” Schapiro said.
She also highlighted five of the biggest issues the SEC will have to write rules on, as part of the new legislation: OTC derivatives, hedge funds, fiduciary standards for brokers and investment advisers, corporate disclosure, and credit rating agencies.
Schapiro said the SEC is getting started quickly and on Tuesday issued a formal request for public comment on the fiduciary standards.
Further, she noted that the Dodd-Frank Act confirms the SEC’s authority to adopt rules that make it easier for shareholders to nominate directors — an issue known as proxy access.
The business community has fought shoring up proxy access, saying it could give fringe shareholders too much control over corporate boards of directors.
Schapiro said she’s committed to bring a final rule before the commission in time for rules to be in effect for the 2011 proxy season.
Reporting by Kim Dixon and Karey Wutkowski, editing by Gerald E. McCormick and Tim Dobbyn