Three-Part Harmony

If what SEC Chairman Christopher Cox and NASD Chairman and CEO Mary Schapiro each spoke of at the Securities Industry and Financial Markets Association (SIFMA) conference in Boca Raton on November 9 and 10 comes to pass, a harmonious set of rules from the NASD and NYSE, and a unified self regulatory organization (SRO) for broker/dealers and exchanges may be well on its way. This must be music to the ears of broker/dealers who have seen the amount of time and money spent on compliance skyrocket since 2003, and been frustrated dealing with multiple–and sometimes conflicting–sets of regulations.

“All of that hard work has essentially been completed–and the resulting recommendations are even now being reviewed internally at the NYSE and NASD. As a result, I expect that we will soon see proposed rule changes filed with the SEC for the purpose of harmonizing the NYSE and NASD rules,” Chairman Cox said in a speech to the newly-launched SIFMA, which combined the Securities Industry Association and the Bond Market Associations into one industry association/lobbying group.

Emphasizing the need to balance the need to protect the investing public while not crushing innovation in the securities markets, Chairman Schapiro brought up in her remarks “the alternative of prudential regulation,” but added that “invasive regulation” could again become the reality for the industry if necessary. But she said that a lot of the rules review had been accomplished already and that “we have met with the industry and the New York Stock Exchange to harmonize the rulebooks of both self-regulatory organizations and we will begin to propose harmonizing rule amendments, on a rolling basis, beginning with our next Board meeting in December.