In a speech at the SIFMA Regional Conference, Gallagher says that the SEC must prioritize its rulemaking in light of the theoretical extent of required rulemaking. He is moderately explicit that the SEC cannot reasonably adopt all of the rules that Congress has charged it with adopting, and so the SEC must choose the ones on which to focus. In this regard, he points to the recent releases relating to conflict minerals as being well-intentioned, but essentially relating to matters that are outside of the SEC’s expertise. He also states that he believes that even within the securities area, there are certain areas to which the SEC should give greater focus (derivatives) and certain areas that are of relative lesser importance (municipal advisors). The other area that he indicates is of particular significance, but that is not a subject of Dodd-Frank, is the regulation of money market funds.
Lofchie Comment: Although far less negative, SEC Commissioner Gallagher’s comments as to the SEC are consistent in direction with the comments made by CFTC Commissioner O’Malia as reported in yesterday’s news. That is, Commissioner Gallagher essentially says that the SEC does not have time to focus on the genuinely important issues and Commissioner O’Malia says that the CFTC has so much on its plate that it is simply rushing through the rule-making process and churning out badly flawed rules.
To make matters worse, in reading each Commissioner’s remarks, there is only bleakness on the regulatory horizon: more and more rules are required to be adopted, many of uncertain value, while clear issues of systemic risk (money market funds) go unaddressed.
View speech in full here (links externally to SEC website).