Roel Campos Forecasts Regulatory Landscape

The SEC, Campos said, must “do a better job” and be a stronger agency going forward. He acknowledged that the major players in the financial crisis have been “bank-centric.” However, there is a possibility that the SEC could get “carved out” and lose, for instance, it’s business conduct authority. This would not be wise, he said, because the SEC would thus lose its ability to prosecute fraud. “Fraud should still be the purview of the SEC” under any new regulatory restructuring, he said. There’s talk of consolidating the CFTC and SEC as well, he said, which he argued would be a positive development, since it could be given oversight of hedge funds and credit default swaps, for instance. However, he said an expanded agency should be self funded through fees on the entities it regulates, allowing the SEC “to bring in experts that understand these complicated products.”

As for regulation of registered investment advisors and broker/dealers, Campos said he would encourage a new SEC Chairman to impose “a common set of rules” for both, saying it was a “historical anomaly” that there are two sets of rules for RIAs and B/Ds. However, he acknowledged that’s “easier said than done.”