Mary Schapiro to Head SEC

Schapiro has extensive experience with the SEC, as she served a six-year term as a commissioner during Ronald Reagan’s administration, and was then named acting chair of the SEC during President Bill Clinton’s term; Clinton subsequently named her chief of the CFTC. While there’s no argument that Schapiro has extensive regulatory experience, she will, nonetheless, “have her hands full as she strives to restore confidence in the SEC,” says David Tittsworth, executive director of the Investment Adviser Association (IAA) in Washington.

There have been talks of consolidating the CFTC and SEC under a broad financial services regulatory overhaul, but Campos warns not to “assume that this Administration, in the near future, would spend energies to bring both of those agencies together.” Instead, he expects the Obama team will expend time trying “to cover the gaps in regulation.” Schapiro will be particularly helpful in doing just that. “Her experience at the CFTC will be hugely helpful in trying to fill in the regulatory gaps that have been identified–credit default swaps, derivatives, and other hybrids that are part futures and part securities or insurance products,” Campos says. “All of those things need to be brought under some coherent regulatory umbrella, and Mary’s experience will be helpful. She knows what the issues are at both agencies.”

Tittsworth says his group is anticipating working with Schapiro on issues that affect advisors, specifically “those relating to the SEC’s structure and mission, potential ‘harmonization’ of laws and regulations governing brokers and investment advisors, and whether a self-regulatory organization (such as FINRA) should be established for investment advisors.” The IAA, he reminds, “consistently opposed an SRO for investment advisors because we believe it would create an unnecessary, costly, and duplicative layer of regulation.”