Just as Mary Jo White was sworn in Wednesday morning as the 31st chair of the Securities and Exchange Commission, two other SEC commissioners are likely on their way out.
White, who was confirmed by the Senate on Monday, said in a statement Wednesday that it was “an honor to lead the talented and dedicated SEC staff on behalf of America’s investors and markets. Our markets are the envy of the world precisely because of the SEC’s work effectively regulating the markets, requiring comprehensive disclosure, and vigorously enforcing the securities laws.”
Elisse Walter, who was interim chairwoman after former SEC Chairwoman Mary Schapiro left in December, will remain at the agency as a commissioner, but it doesn’t look like she’ll be there for long.
While SEC spokesman John Nester says that Walter hasn’t said how long she will stay on, President Barack Obama is likely to name replacements for both Walter — a Democrat whose term expired last June — and Republican SEC Commissioner Troy Paredes, “in the coming weeks,” says David Tittsworth, executive director of the Investment Adviser Association in Washington.
Walter is able to continue serving until Congress adjourns later this year, or until another person is nominated and confirmed by the Senate. Paredes’ term expires in June 2013, and he’s indicated that he’d like to return to academia, Tittsworth notes.
An industry official who asked for anonymity told AdvisorOne that at least three people have surfaced as possbile replacements for Walter and Paredes: Mike Piwowar, an economist on the Senate Banking Committee’s staff, would replace Paredes, while Kara Stein of Sen. Jack Reed’s, D-R.I., staff or Smeeta Ramarathnam, SEC Commissioner Luis Aguilar’s chief of staff, are two possible replacements for Walter.
The “pairing” of Democrat and Republican nominees, TIttsworth says, “makes it much more likely that the nominations could move quickly in the Senate. Thus, I expect that President Obama will have to make the nominations in tandem, sometime in the coming weeks.” Prompt Senate confirmation of both nominees is also likely, Tittsworth adds.
The changing faces at the commission raise questions about the progress of the SEC’s fiduciary rule this year. While White told members of the Senate Banking Committee in March that the pending request for information regarding the costs and benefits of a fiduciary rule would be a “priority” for her, the comment period on that proposal doesn’t close until July.
Says Tittsworth: ”Typically, the agency has received many comment letters on these issues and it would be likely that it would take several months before the SEC may approve a formal rulemaking proposal (which would also be subject to written comments).”
What’s more, with the likely replacements for Walter and Paredes on board, Tittsworth says that “the issues relating to the SEC’s pending request for information and any subsequent formal rulemaking proposal will be determined by a different group of commissioners.”
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