Regulation And Legislation

New NASAA chief: Time to beef up the SEC

Ohio Securities Commissioner Andrea Seidt is concerned that the Securities and Exchange Commission is getting bogged down. As…

Ohio Securities Commissioner Andrea Seidt is concerned that the Securities and Exchange Commission is getting bogged down. As the newly appointed head of the North American Securities Administrators Association Inc., she wants state securities regulators to help the SEC get more federal funding and work more efficiently. Ms. Seidt took over the NASAA presidency Oct. 8 at the organization’s annual conference in Salt Lake City.

InvestmentNews: You have mentioned modernizing state securities regulation as an emphasis. What else is on your agenda?
Ms. Seidt: Helping the SEC get past Dodd-Frank and the JOBS Act. I feel like the movement has just completely stalled, and cost-benefit analysis is part of the issue. If securities regulators, including us at the state level, can work with industry to negotiate common ground on some of the rule-making proposals, if we can issue joint comment letters, we will empower the SEC to make quicker decisions, hopefully, that will withstand scrutiny from the D.C. Circuit [Court].

IN: What is on NASAA’s legislative agenda?
Ms. Seidt: There is fiduciary duty. That’s not a new issue, but it still hasn’t been resolved. We want to move that forward. I think that is an area where other large players in the industry and NASAA have common ground. The investment adviser examination gap at the federal level — we want to see that closed. NASAA has advanced a user fee bill as part of the solution. It’s been five years since the meltdown; it’s time to give the SEC the appropriate resources so you wouldn’t have to resort to other methods to close that gap. We may lobby a little more directly with Congress in the appropriations process.

IN: Can state securities regulators help break the partisan deadlock over the SEC budget?
Ms. Seidt: Maybe we can’t. But we have a new [SEC] chair, we have new commissioners, we have new division leadership. [SEC Chairman Mary Jo] White has asked for 250 more [investment adviser] examiners. If that’s all that’s needed to close that gap, I’d like to think we can get there. Who can oppose that?

IN: Private funds have been able to advertise to the public for two weeks. What do you think so far?
Ms. Seidt: It’s too early, probably, to tell. But I’ve perused the web in the last week to see if I’ve noticed an uptick. This is not a science project, but there is no shortage of opportunities — page after page after page of opportunities. I don’t know if that’s more than prior to Sept. 23, but I suspect it might be. We anticipate it will have a big impact.

IN: About 2,100 midsize investment advisers moved from SEC to state oversight as of February. What did you learn from the switch?
Ms. Seidt: Our takeaway is that the states are up to the challenge. We have strong examination programs and successfully absorbed that additional responsibility from Dodd-Frank. There were a lot of doubters as to whether or not states could do that. States have shown that they worked collaboratively … to minimize the impact on the switching firms.

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