COX DEFENDS SEC’S INDEPENDENCE AND ENFORCEMENT MISSION
SEC Chairman Christopher Cox called for significant regulatory reforms while defending the SEC’s role as an independent regulator focused on law enforcement. Chairman Cox argued for a statutory regulator of investment bank holding companies to regulate their safety and soundness. He also said that Congress should expand the SEC’s authority into unregulated derivatives such as credit default swaps and allow the SEC to bring necessary disclosure to the municipal securities market. Chairman Cox contrasted the SEC (“unique it its arm’s length independence from the institutions and persons it regulates”) with the banking regulators where those regulated lead the Fed through industry election. He also argued that enforcement and not mere supervision is critical to liquid securities market. In this regard, Mr. Cox said that “First and foremost, the SEC is a law enforcement agency.”
OUR TAKE: Chairman Cox seems to be arguing that the answer to recent regulatory breakdowns is not to scrap the SEC but to expand its authority. Chairman Cox has begun the political process of defending the SEC’s very existence. It is possible that a new regulatory regime focused on supervision would either replace the SEC’s function or bring it under some form of super-regulator.