|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
One Regulator To Rule Them All?
Jenny Anderson
The New York Times. November 25, 2005
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EXCERPT: On Dec. 22, 2002, a swarm of securities regulators gathered on a stage to announce a pact with Wall Street firms to improve the quality of investment research. Representatives from the Securities and Exchange Commission, the New York Stock Exchange, the New York attorney general's office, the North American Securities Administrators Association, and state regulators, were present. Only Sheriff Rosco P. Coltrane of Hazzard County seemed to be missing. At the time, Wall Street executives griped quietly about the sheer number of regulators. They did it quietly, of course, because they had just been caught issuing blatantly biased research. Three years later, the securities industry is calling on Congress and the S.E.C. to streamline regulation. Specifically, the industry and some of the regulators themselves want to consolidate the New York Stock Exchange and NASD's regulation of certain broker-dealers. On its face, this couldn't seem like a worse idea. There appear to be dozens of reasons not to scale back regulation, including the behavior of Enron, WorldCom, Tyco International, or, more recently, American International Group, Bayou and Refco. But it is a good idea. Not because it would make life easier for the industry, but because if done correctly, it would mean creating a stronger regulator for the industry. The S.E.C. revived the debate in March, when it issued a paper on self-regulation, offering alternatives for comment about various ways to regulate the market. The planned transformation of the N.Y.S.E. to a for-profit entity through a merger with Archipelago has raised questions about how a for-profit exchange can regulate itself. And the issue of self-regulation is ripe for discussion now that the S.E.C. has a new chairman, Christopher Cox. Currently, N.Y.S.E Regulation regulates the New York exchange and its 400 member firms with more than $4 trillion in customer accounts. The NASD regulates the Nasdaq market and 5,200 broker-dealers, or every one that does business with the public. About 180 firms are members of both. And therein lies the issue. Those are the largest, most powerful firms, and require close oversight. |
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