Cox Calls For SRO Consolidation

In a speech to the Securities Industry and Financial Markets Association on November 10, 2006, SEC Chairman Cox endorsed current efforts to fold the member regulation functions of the NASD and NYSE into one regulatory body noting, “I’m firmly convinced that, done properly, this can make our self regulatory system more efficient and more robust from an investor protection standpoint.” The SEC Chairman offered four reasons for his support: 1) there are inherent conflicts between current SRO regulatory operations; 2) multiple SRO operations impose needless costs; 3) increases in cross-market trading make market surveillance increasingly difficult; and 4) questions concerning whether a SRO devotes sufficient resources to its regulatory operations. The Chairman’s comments were cast as a follow up to an SEC Concept Release, Concept Release Concerning Self-Regulation (Release No. 34-50700), in November 2004.