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.