07 April 2009

SEC Schapiro outlines forthcoming reform proposals

The SEC will be considering whether greater disclosure is needed about how a company manages risks, both generally and in the context of setting compensation. “I do not anticipate that we will seek to mandate any particular form of oversight”.

SEC chairman Mary Schapiro outlined the measures the SEC intends to undertake. Looking at compensation disclosures, the SEC will be considering whether greater disclosure is needed about how a company manages risks, both generally and in the context of setting compensation.

 

“I do not anticipate that we will seek to mandate any particular form of oversight”, Schapiro said stating that the Commission will also consider whether greater disclosure is needed about a company's overall compensation approach.

 

Other potential reforms include:

Ø       Requiring those with custody of client assets to undergo an annual third-party audit, on an unannounced basis, to confirm the safekeeping of those assets.

Ø       Harmonizing the responsibilities of investment advisers and broker-dealers, so that investors who use either can expect a uniform level of professionalism and accountability.

Ø       Mandating that certain investment advisers have third-party compliance audits to ensure their compliance with the law.

Ø       Registering hedge fund advisers, and potentially the hedge funds themselves.

Ø       Requiring more disclosure from credit rating agencies, including potentially the assumptions underlying their methodologies, fees received from issuers, and factors that could change ratings.

Ø       Overseeing more vigorously the credit default swap market, including considering reporting and recordkeeping rules that do not exist today.

Ø       Enhancing the standards applicable to money market funds.

Ø       Providing investors in municipal securities with the same type of disclosure and investor protections as are provided to investors in other securities.

Ø       Enhancing disclosure around asset-backed securities.

 

Full speech

 

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