By Ira Hammerman

Conducting a comprehensive review of the equity market structure, enhancing fixed income markets and improving enforcement techniques are all priorities for the Securities and Exchange Commission this year, noted chair Mary Jo White in remarks to financial professionals at SIFMA’s Annual Meeting.

“The markets are the strongest and most reliable in the world,” White said, “but that doesn’t mean they can’t be optimized. I stand for robust and resilient markets.”

Another high-level goal for the commission includes producing a system that increases disclosure effectiveness, and in turn is more useful to investors. Chair White acknowledged that technology should also work for the investor to increase pre-trade transparency and continually lower transaction costs.

“Reducing the burden on issuers is so key to everything we do to carry out our mission,” White said. “The SEC is all about the fair and equitable.”

The SEC is continuing work to complete the rulemakings assigned to the agency under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Startups Act. The SEC has adopted or proposed 90 percent of the almost 100 mandated Dodd-Frank rulemakings and hopes to finish the remaining requirements by early next year, White said. “We’ve been firing on all cylinders with the Dodd-Frank front,” she said.

“Once you have the rules done, then [we have] to implement and enforce [them],” she said. ” There are lots of responsibilities that will flow from those rulemakings as well.”

White named fiduciary standard regulations as something “enormously important” to tackle, but the commission currently has very diverse views on the subject and has not yet found the right direction to approach them.

“[It’s an issue] that I’m very committed to, that’s very high priority, but very complex,” White said. “The Commission has not made a decision whether to do something or what to do [regarding a fiduciary duty ruling]. But in the short-term, there will be more clarity on that in terms of my own position.”

The SEC is also currently looking into confidentiality agreements for its whistleblower program, and brought its first anti-retaliation action, giving tipsters incentive to come forward without fear of punishment.

“From an enforcement point of view, it’s a very positive development,” White said. “I think the program has been enormously successful.”

White aims to spread transparency and inform the public through the agency’s goal-making process. At the beginning of the fiscal year, the SEC publishes its priority areas to inform the financial community to which areas the agency will be paying attention.

“It’s not a game of gotcha,” White said. “If violations don’t happen, that makes for a strong system, rather than if every compliance issue is an enforcement case. We’re trying to work more closely with you.”

SEC headway impresses White

“I’m very pleased with the strength of our rule-making and the progress that we’ve made, but it’s always an ongoing process,” White said.

For the fiscal year 2014, the SEC brought 755 cases and got orders for more than $4 billion in disgorgement civil penalties and disgorgement, or seizure of illegally obtained profits, both record numbers.

“Look at what we’ve done,” White said. “We’ve enhanced enforcement and improved the number and quality of our cases.”

White addresses concerns over inter-agency bureaucracy and progress

With multiple agencies working on similar yet separate financial issues and tasks, cooperation can often be difficult. When questioned on whether groups such as the Commodity Futures Trading Commission and SEC would be better off merged, White said she approved of the current arrangement, adding that “very thoughtful people have thought about the optimal regimes.”

“The balance that has been struck has been good but requires real coordination,” White said. “You clearly do have different expertises at the different agencies you don’t want to lose.”

White brushed off media critiques of the headway and strength of the SEC, pointing to a strong charge record and the expansive progress the commission has made since White took over as chair in 2013.

“Criticism goes with the territory. I think a lot of the criticism [we] receive is because [we] are a very strong regulator and strong manager,” White said. “[We] pay attention to the criticism, but [we] can’t regulate and lead in response to criticism.”

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Ira Hammerman
Executive Vice President and General Counsel
SIFMA