President Obama has signed what is considered the biggest financial regulatory reform legislation since the 1930’s into law… now what?comment box okcancel resized 600
The SEC and other regulatory bodies are now asked to figure out what this legislation means for the United States’ financial system, and what rules will make it work on Wall Street – and apparently they can’t do it alone.
The SEC and CFTC have issued requests for public comment and advice on what to do next and what rules should be created to enforce the new reform. They say this call for advice will help with transparency and help them, “get it right,” but this call for help brings up a few questions:
1. Are regulators soliciting helpful advice from Wall Street or will the advice simply aid in a new Wall Street agenda?
The CFTC has said, “We know Washington doesn’t have all the answers,” so they have decided to turn to the public for help; the public, for the most part, being Wall Street. It makes people wonder that if Wall Street is the one bestowing this advice, how much of it can truly be seen as genuine aid to our regulatory bodies, and how much of it can be seen as a way to make sure Wall Street gets what it wants. It’s hard to solicit advice from the very people who have helped create the need for these rules in the first place.
2. How much is this advice costing?
The SEC has already spent a lot of man hours in order to expand their current public comment process. They have established e-mail boxes on their web site, and extended the process beyond what is legally required. This calls for added staff and IT support to keep everything organized and functioning properly. So while the SEC is doing what they believe will help make these new rules and established best practices as desired by the public, we have to wonder at what cost.
3. What constitutes a good suggestion?
While we don’t know the number of comments to date that have been submitted to the regulatory bodies to help determine what should be taken into consideration to create new rules and what shouldn’t, it does raise a number of unanswered questions. Who determines what to categorize good advice vs. bad? Who has the final say on whether or not a comment should be used to help create a new rule or not? And, is it really possible to get through all of the suggestions before these new rules are submitted to the public by the proposed December/January deadlines? Right now you may be sitting in your office with a great idea that you feel the SEC or CFTC NEEDS to know about or you may be thinking about a suggestion that you might have already submitted. With that said, one question remains, are you really being heard? I wonder, however, if we will ever know the answer to that question.
There are bound to be many more questions swarming on Wall Street around this call for public aid, what are some of yours?