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From Securities Regulation Daily, February 20, 2015

White opens SEC Speaks conference with review of 2014 and upcoming initiatives

By Jacquelyn Lumb

SEC Chair Mary Jo White opened the annual Practising Law Institute’s SEC Speaks conference with a summary of accomplishments in 2014 and core initiatives planned for 2015. She also paid tribute to former Commissioner Harvey Goldschmid who passed away last week. White said the SEC this year will prioritize reforms that are central to its mission—market structure, risk monitoring of the asset management industry, and capital raising for smaller issuers.

2014 rulemaking highlights. Among the more significant 2014 rulemakings highlighted by White were the adoption of Regulation Systems Compliance and Integrity. She has directed the staff to study, in 2015, whether to recommend extending similar requirements to other major market participants whose operations could have a significant market impact if they are disrupted.

In response to the financial crisis, the SEC adopted money market reform rules and adopted threshold rules for establishing a regulatory framework for the over-the-counter derivatives market. The SEC has proposed all of the rules mandated by Title VII of the Dodd-Frank Act. The SEC also adopted rules to further reform the asset-backed securities markets and to reform the regulation and oversight of credit rating agencies.

The SEC will continue to focus on cases involving violations where market participants fail to provide a level playing field in the markets. White also reported that the SEC’s renewed focus on financial reporting and auditing fraud resulted in a 40 percent jump in those cases last year.

The Office of Compliance Inspections and Examinations had a very productive year, with 1,850 registrant examinations, a 15 percent increase from 2013. White attributed the increased production to OCIE’s use of technology, including its National Exam Analytics Tool, which helps detect suspicious activity.

2015 priorities. In 2015, White said the staff will develop recommendations to enhance the transparency of alternative trading system operations, expand investor understanding of broker routing decisions, address the regulatory status of active proprietary traders, and propose an anti-disruptive trading rule to address market stability concerns. The newly formed Market Structure Advisory Committee will provide input as part of the staff’s review of the equity market structure.

The staff is developing three sets of recommendations with respect to portfolio composition and the operations of the asset management industry. These initiatives are aimed at modernizing and enhancing data reporting by funds and investment advisers, ensuring that effective risk controls are in place, and planning for market stress events.

With respect to smaller issuers, White said the SEC is focused on implementing the final two mandates of the JOBS Act—Regulation A+ and crowdfunding.

There are a number of additional priorities on which the SEC will focus in 2015, including whether to adopt a uniform fiduciary duty for broker-dealers. The SEC will also advance its initiative on disclosure effectiveness and a definition of accredited investor; explore ways to increase its exam coverage of investment advisers; enhance the broker-dealer financial responsibility rules, and update the regulatory regime for transfer agents, according to White.

MainStory: TopStory SECNewsSpeeches

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