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SEC Chair Mary Jo White Discusses “State of the SEC”

At PLI’s annual SEC Speaks conference, SEC Chair Mary Jo White provided an update on the state of the SEC and previewed the agency’s priorities for the year ahead.  She discussed the SEC’s Dodd-Frank and JOBS Act rulemaking agenda, noting that the SEC faces “an unprecedented rulemaking agenda” at a time when the SEC’s funding falls “significantly short of the level we need to fulfill our mission to investors, companies, and the markets.”  While pledging to make the best use of the SEC’s current funding levels, she stated that obtaining additional funding to fulfill the SEC’s mission would be a top priority.

One of the SEC’s 2014 priorities includes continuing to work with other regulators, both in the U.S. and abroad, to address systemic issues in our financial system.  Chair White emphasized the need to address such risks in a way that distinguishes between prudential risks and others and avoids “a rigidly uniform regulatory approach solely defined by the safety and soundness standard that may be more appropriate for banking institutions.”

Chair White echoed the desire of others (including SEC Commissioner Stein and FINRA Chair Ketchum) in progress on the implementation of the consolidated audit trail, which would enhance information available to regulators about the equity markets.  She also discussed other market structure issues, including addressing vulnerabilities in the technology that underlies the securities markets.

With respect to the Division of Investment Management, she discussed the recent efforts of the Division to use risk based monitoring of asset managers and funds.  She shared her request that the IM staff develop an “action plan” to enhance the SEC’s asset manager risk oversight program.  Other short-term Division initiatives she mentioned include consideration of expanded stress testing, more robust data reporting, and increased oversight of the largest asset management firms.