Thursday, 29 January 2015
Last updated 16 min ago
Jan 16 2009 | 1:50am ET
President-elect Barack Obama’s choice to head the Securities and Exchange Commission said that she might reinstitute the agency’s hedge fund registration rule.
Mary Schapiro told the Senate Banking Committee at her nomination hearing yesterday that she would consider resurrecting the registration rule, which was thrown out by a federal court in 2006. Requiring hedge funds to show their books to regulators “will give us a better handle on who is out there and what they are doing,” Schapiro said.
Schapiro, who served as an SEC commissioner from 1988 until 1994 and as head of the Commodity Futures Trading Commission from 1994 until 1996, laid out several other goals she has, pending her confirmation by the Senate. She proposed a semi-independent, government-backed credit rating agency and a central clearinghouse for credit default swaps. She suggested that the former might be funded by transaction fees collected by stock exchanges as part of their listing requirement.
Schapiro also said she would reexamine the uptick rule, which limited short sales, but she demurred on the question of whether the SEC and CFTC should be merged. She also focused on the SEC’s enforcement capability, which has been roundly criticized for failing to uncover the alleged $50 billion Ponzi scheme run by Bernard Madoff despite repeated warnings and several investigations.
“I will move aggressively to reinvigorate enforcement,” she said. “We need an SEC that is the investor’s advocate—that has the staff, the will and the resources necessary to move with great urgency.”
“I think the agency has to have a laser-like focus on fraud and investor protection,” Schapiro added.
Schapiro has been accused in two lawsuits of making misleading statements in her effort to merge the regulatory divisions of the New York Stock Exchange and NASD. The entity that merger created in 2007, the Financial Industry Regulatory Authority, where Schapiro serves as CEO.
Despite that cloud, and despite criticism that FINRA failed to uncover the Madoff scandal, Schapiro is expected to quickly win confirmation.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…