The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (CCMC) issued a report recently detailing changes the Securities and Exchange Commission should make to the agency’s core operations that will ensure an efficient and effective capital market regulatory system.

The CCMC study found that obtaining guidance or key decisions from the SEC via its staff no-action letters, exemptive orders, and self regulatory organization rule orders is increasingly difficult and unpredictable. This jeopardizes investor protection and is a “barrier to responsible market innovation,” the study says.

The CCMC study also addresses what it says are “organizational structure and management shortcomings” at the SEC, and suggests the agency realign key operating divisions–such as the Division of Investment Management and Division of Trading and Markets into a Division of Investor Protection and Retail Financial Services Regulation and a Division of Market Oversight and Operations. The study notes that “the size, structure, and complexity of the U.S. capital markets and financial companies have grown substantially in the past 30 years,” and while the size of the SEC has increased significantly over that time, “its organizational and management structure has not changed to reflect these developments.” The study suggest that the SEC also establish a Chief Operating Officer as well as form a new Coordinating Council to ensure better coordination and more uniform regulation across the SEC’s divisions.

Recommendations found in the study “can be implemented under current SEC jurisdiction and can increase the agency’s ability to effectively allocate regulatory resources in the short-term,” the study notes. The study findings are based on more than 60 interviews with a broad range of experts, including Chamber members, securities law practitioners, and current and former SEC staff.

Jason Rosenstock, an associate in the government affairs practice at international law firm Paul Hastings in Washington, says that by issuing its report, the Chamber of Commerce “is trying to encourage the SEC to administratively make some improvements to stave off what the Chamber likely views as burdensome regulatory changes that Congress would put in place instead.”

Indeed, Michael Rosella, chairman of the Investment Management Practice at Paul Hastings in Washington, says given there are “macro changes” to the SEC that are being considered by Congress under financial services reform, the Chamber’s study suggests more “micro, day-to-day changes” that the agency should make.

For instance, when it comes to exemptive orders–which are exemptions from statutory requirements that are granted by the Division of Investment Management–”where there are routine applications granted to these sectors of the investment management business, there is a screaming opportunity to do this on a more efficient basis,” Rosella says. The best way to do so, he argues, “is not to make the application process more efficient but to codify into regulation the core of what these standard exemptive relief applications have granted.” The codification process, he continues, “is a very efficient way for the SEC to say, ‘Look, you don’t have to get relief [to launch] an ETF if you do the following six things and in the following ways.’ That’s very efficient. To say you’re going to speed up the application process and not codify it, that’s fine, too, but you still have to have some person at the SEC, as opposed to the private sector, review the application and make sure the facts haven’t been changed and the results are appropriate.”

Rosella warns, too, that the asset management industry should take note that SEC examiners, post the Bernie Madoff Ponzi scheme, are being sticklers for detail. “Frankly, we’re seeing it already, the level of minutiae and questions raised in the [examination] process gets puffed up because [SEC examiners] don’t want to be seen as leaving any stone unturned. Now, that could be good if you’re finding bad things, but sometimes you find that a lot of that is not the case.”