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As you know, the Dodd-Frank Act fills a number of significant regulatory gaps, brings greater public transparency and market accountability to the financial system, and gives the SEC important tools to better protect investors.
These comments are from SEC Chairman Mary Schapiro at today’s Senate Committee on Banking, Housing, and Urban Affairs
The Act includes over 100 rulemaking provisions applicable to the SEC, many of which require action within one year. It also requires the SEC to conduct more than twenty studies and create five new offices. While this is a very significant task, we are fully committed to fulfilling our mandates under the Act, as well as our preexisting responsibilities.
My testimony today will describe our progress and plans for implementing the Dodd-Frank Act, particularly with respect to those issues that you specifically inquired about: derivatives regulation, clearance and settlement activities, registration of private fund advisers, credit rating agency regulation, corporate governance and executive compensation regulation, reforms to the asset-backed securitization process, the standard of care applicable to financial intermediaries, and other improvements to investor protection.
Process and Priorities
Let me begin by discussing our overall approach to implementing the new rules, studies, reports, offices and other actions mandated or contemplated by the Dodd-Frank Act.
Internal Processes
To hit the ground running, we established new internal processes and formed cross-disciplinary working groups for each of the major rulemaking initiatives and studies, and designated team leaders for each effort. Our rule writing divisions and offices are meeting weekly to review the status of rulemakings and studies and to plan for the upcoming weeks. My office and the Office of the General Counsel oversee and coordinate much of this planning effort, and all Commissioners are provided with both written weekly updates and monthly oral briefings on status.
Public Consultation
We also have enhanced our public consultative process by expanding the opportunity for public comment beyond what is required by law. To maximize the opportunity for public comment and to provide greater transparency, less than a week after the President signed the Act, we made available to the public a series of e-mail boxes to which interested parties can send preliminary comments before the various rules are proposed and the official comment periods begin. These e-mail boxes are on the SEC website, organized by topic. Since July 27th, the public has been providing preliminary comments on 31 topics, including over-the-counter (“OTC”) derivatives, private funds, corporate disclosure, fiduciary duty, credit rating agencies, and other areas in which the SEC will be conducting rulemaking and studies over the next 12 to 18 months. We also specifically solicited comment on the definitions contained in Title VII of the Act, on the interim final rule on temporary municipal advisor registration and on the study we have undertaken regarding the effectiveness of the existing legal and regulatory standards of care for broker-dealers and investment advisers when providing personalized investment advice about securities to retail investors.
To read the full transcript of Mary Schaprio’s testimony, visit the SEC website.