Reform bill a winner, says head of state securities group

The head of the state securities regulators' organization is calling the financial reform bill a winner. “One thing we're really happy about is that on this financial stability oversight council, we will have a representative in that group,” said Denise Voigt Crawford, Texas securities commissioner and president of the North American Securities Administrators Association Inc. "We had worked very hard to get a state regulator in there.” The proposed oversight council would be responsible for monitoring systemic risk. Under the compromise plan worked out by House and Senate negotiators last week, the council would include as non-voting members a state insurance commissioner, a state banking supervisor and a state securities commissioner. Ms. Crawford said the bill will also close off private securities offerings to felons and other bad actors, a change state regulators supported. In addition, the asset threshold for advisers to be placed under SEC jurisdiction would be raised to $100 million under the compromise bill, up from $25 million currently. "That's going to mean more work for us, but we're very, very pleased at this," she said. "There are more than 3,000 [SEC] advisers that the SEC has not looked at, so we need to change that." State regulators have also been pushing for a fiduciary standard for anyone giving advice to investors and Ms. Crawford expressed disappointment with the language in the compromise bill, which calls for a six-month study about the differences between the regulatory regimes governing broker-dealers and advisers. "We're not ecstatic about it because the result is another study," Ms. Crawford said. After the study, the SEC would be empowered to engage in rulemaking to close any gaps, and would be given explicit authority to impose a universal fiduciary duty. But imposing such a duty is only an option, Ms. Crawford said. "Who knows how that will turn out?" she said.