U.S. Chamber Study Proposes Changes to Improve SEC Regulatory Effectiveness

Makes 23 Recommendations Including Establishment of a COO

WASHINGTON, D.C. — The United States Chamber of Commerce's Center for Capital Markets Competitiveness today recommended 23 changes to certain core operations of the U.S. Securities and Exchange Commission (SEC) that will help improve the agency's regulatory oversight process.

"A critical component to restoring our nation's economic stability and the health of our capital markets will be the ability of our regulators to provide more effective and predictable oversight," said David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness. "Recent failures in market oversight have highlighted the extreme consequences of ineffective regulation. While the Chamber continues to focus on broader, long-term solutions to modernizing our outdated financial services regulatory framework, our study provides 23 concrete, implementable steps to help get one of our key regulatory agencies back on track in the short-run."

Six of the report's recommendations address overarching issues related to the organizational structure and management shortcomings of the agency. The report recommends realigning key operating divisions, establishing a chief operating officer (COO) for the SEC, as well as forming a new Coordinating Council to ensure better coordination and more uniform regulation across the SEC's divisions.

"The SEC lacks a central coordinating mechanism to ensure the agency's divisions can't operate as independent silos that don't share key information or common approaches to regulation," said Hirschmann. "These recommendations are intended to improve management coordination within the SEC, increase consistency and communication across operating divisions, and strengthen the role of the five-member commission in key areas."

The study concentrates on improvements that can be made to three core SEC functions – staff no-action letters, exemptive orders, and self-regulatory organization (SRO) rule orders – with the goal of clarifying review standards, instituting firm statutory response deadlines, and increasing the transparency of these processes.

"Regulated persons and entities believe that obtaining guidance or key decisions from the SEC through these processes is increasingly difficult and unpredictable," said Hirschmann. "This jeopardizes investor protection and is a barrier to responsible market innovation."

The study focuses on recommendations that can be implemented under current SEC jurisdiction and can increase the agency's ability to effectively allocate regulatory resources in the short-term. The study findings are based on more than 60 interviews with a broad range of experts, including Chamber members, securities law practitioners, and current and former SEC staff.

To view the full study and all 23 recommendations please visit /ccmc

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

The U.S. Chamber's Center for Capital Markets Competitiveness (CCMC) protects investors and consumers, and ensures that our markets successfully supply businesses and risk-taking entrepreneurs with necessary capital to grow, innovate, and create jobs.

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