Players Need to Lean on Congress

Investors and market players looking for significant regulatory changes in market structure from the U.S. Securities and Exchange Commission are unlikely to see major action unless they actively advocate for new rules, said a panel at Markets Media's Global Markets Summit on Thursday in Manhattan.

“The only way to get the SEC to move is if Congress gets involved,” said Michael Halloran, partner, Kilpatrick Stockton. “It is not something that will easily come to regulators, to do all that work and amend all those rules, in order to fix the market.”

That process “gets hijacked by the political crisis du jour,” added moderator David Weild, capital markets advisor at Grant Thornton, as regulators become increasingly focused on creating more investor protections in the face of sweeping financial scandals.

Other members of the panel, “The Capital Markets & Capital [Re] Formation Debate: What Can Be Done?,” included Barry E. Silbert, CEO, SecondMarket.

“Right now, the [SEC] is putting a lot of focus on enforcement, as opposed to focus on market structure,” said Halloran. “Sure, they are putting a lot of pressure on investment banks, making sure they are well capitalized. But in terms of market structure today, it simply is not a priority.”

That likely will not change until market participants begin advocating for more regulatory focus on market structure.

“It is unfortunately a political atmosphere at the SEC, so you will absolutely have to get Congress involved if you want to get anything done,” said Halloran.

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Posted on Dec. 4, 2009