|Targeted News Service|
Chairman Garrett, Ranking Member Maloney, and Members of the Subcommittee:
Thank you for inviting me to testify on behalf of the
The mission of the Division is to support the Commission's mandate by fostering investor protection and establishing and maintaining standards for fair, orderly, and efficient markets. To this end, the Division is responsible for the rules that apply to many of the major participants in the U.S. securities markets, such as exchanges, clearing agencies, alternative trading systems (ATS), broker-dealers, transfer agents, securities information processors (SIP), the
The Division works closely with other divisions and offices within the Commission, including the
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Jumpstart Our Business Startups Act (JOBS Act) added substantial new responsibilities to the Division's portfolio. The Division is primarily responsible for more than 30 separate mandatory rulemaking initiatives and studies under the two statutes, as well as the ongoing oversight and implementation they require. These new responsibilities include:
* The creation of a new regulatory structure for over-the-counter (OTC) derivatives, including clearing, trading, reporting, and registration rules;
* The regulation and monitoring of clearing agencies designated as systemically important;
* The prohibition of proprietary trading by insured depository institutions and their affiliates, part of the "Volcker Rule"; and
* The development of new rules for intermediaries engaged in "crowdfunding," a novel mechanism for obtaining capital from a large number of investors.
Although the Division's day-to-day and long-term focus covers a much wider set of initiatives and mandates, I want to highlight in this testimony five key areas of responsibility and our current efforts in each: first, equity market structure and related initiatives involving market infrastructure; second, our work to implement rules for OTC derivatives as required under Title VII of the Dodd-Frank Act (Title VII); third, rulemaking to enhance standards for certain registered clearing agencies; fourth, our consideration of rulemaking under Section 913 of the Dodd-Frank Act relating to the standards of care and other obligations for broker-dealers and investment advisers; and, fifth, initiatives in the fixed income markets.
Equity Market Structure Review
The U.S. equity markets are the strongest in the world, reliably serving millions of investors and facilitating capital formation for thousands of public companies. To ensure they continue to provide this critical function, a series of initiatives to evaluate and enhance equity market structure are at the forefront of the Division's priorities. The Division will play a lead role in the comprehensive review of equity market structure described by Chair White in a recent speech. This initiative will include a review of the evolution of market practices over the last decade and the role of Commission rules - in particular Regulation NMS - in that evolution, and the need for any adjustments or enhancements to that structure.