Posts Tagged ‘Elisse Walter’

Reporting, Accounting, and Auditing in Financial Markets

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Thursday June 20, 2013 at 9:14 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission and was the Chairman of the SEC from December 2012 to April 2013. This post is based on Commissioner Walter’s recent remarks at the SEC and Financial Reporting Institute Conference, available here. The views expressed in this post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

You may not hear this too often from people outside your profession, but I have always had a passion for accounting and auditing. I think this has its roots in the time I spent with my father, who was a CPA and the CFO of a publicly-held company; he helped me begin to understand just how important accounting is to business and the financial system. Of course, in my more than two decades with the SEC, which included close to a decade in the Division of Corporation Finance, I have developed a deeper and more complete understanding of the critical role accounting and auditing professionals play in our capital markets.

And today, I am pleased to see that we are working to adapt and expand that role to serve investors and other stakeholders even more effectively in the years ahead, by addressing critical issues at a moment of great change and important progress in the worlds of finance and accounting.

…continue reading: Reporting, Accounting, and Auditing in Financial Markets

Regulation of Cross-Border OTC Derivatives Activities: Finding the Middle Ground

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Wednesday April 24, 2013 at 9:29 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission and was the Chairman of the SEC from December 2012 to April 2013. This post is based on Commissioner Walter’s recent remarks at the American Bar Association Spring meeting, available here. The views expressed in this post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

Today at the SEC and in government agencies around the world, regulators are shaping the rules that will govern the way over-the-counter derivatives are transacted. It’s a crucial task given the magnitude and importance of this market to the international financial system.

In the process, all of us are grappling with the fact that these transactions rarely respect national boundaries. They are complex transactions that routinely cross borders, and are potentially subject to multiple sets of rules.

To ensure our regimes work effectively, we need to have a common sense, flexible approach to the cross-border regulation of derivatives.

…continue reading: Regulation of Cross-Border OTC Derivatives Activities: Finding the Middle Ground

Financial Literacy, Investor Protection, and Public Service at the SEC

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Friday April 12, 2013 at 10:04 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission and was the Chairman of the SEC from December 2012 to April 2013. This post is based on Commissioner Walter’s recent remarks before students at The George Washington University in Washington, D.C., available here. The views expressed in this post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

What I’d like to talk about this evening is something that isn’t always recognized in day-to-day discussion of business and government and their interaction. That is, the importance of the public sector and those who work in the public sector, like my many dedicated colleagues, to the health of our markets and to a flourishing economy.

Of course, the regulations we write at the SEC, the examinations we conduct, and the enforcement actions we bring demand time and resources that businesses would rather spend on other things. But, the truth is that the SEC wants the investing public and the businesses in which they invest their hard-earned money to succeed.

That is why the SEC was created in 1934 as part of the effort to lift the American economy out of the rubble of the Great Depression. Since then, we have worked for nearly 80 years to make our capital markets the strongest and most vibrant in the world. And we understand that economic growth on a national level is the product of millions of individual financial achievements, so a great deal of our work is focused on facilitating your success:

…continue reading: Financial Literacy, Investor Protection, and Public Service at the SEC

Enhancing Disclosure in the Municipal Securities Market: What Now?

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Sunday November 18, 2012 at 8:52 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s recent remarks before the Bond Buyer’s California Public Finance Conference in San Francisco, California, which are available here. The views expressed in this post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

So, here we are in California — in beautiful San Francisco. For better and for worse, California municipal finance is national news.

As an SEC Commissioner, my job in general doesn’t get me involved in the specifics of the individual municipal finance debates covered in today’s news — at least not in my official capacity.

My job is to protect investors in the roughly $4 trillion municipal securities market, maintain fair, orderly and efficient markets, and facilitate capital formation.

And, as a member of the Commission that serves the public as the investor’s advocate, I want to remind everyone that, without the trust and willingness of investors, projects that are critical to our country’s infrastructure could suffer. These include vital projects such as water, schools, roads, hospitals, and many others.

I’d like to talk about the importance of better protection for muni investors and how the Commission under Chairman Schapiro’s leadership is enhancing investor protection. I’ll also share my personal observations on the “what now” question that follows the issuance of our recent Report on the Municipal Securities Market.

As I walk through this, I want to make it clear that your support in these efforts is critical — that whatever we do, it will be done better if we have your input and support.

…continue reading: Enhancing Disclosure in the Municipal Securities Market: What Now?

International Coordination Among Regulators

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Wednesday October 31, 2012 at 8:42 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s remarks to the American Bar Association International Section, available here. The views expressed in this post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

As you may know, I am the Commission’s designated representative on the Financial Stability Board, or FSB, which is an international forum of prudential financial regulators, market regulators, international financial institutions and standard setting bodies. And last spring I finished a tour of duty as the Commission’s head of delegation to the International Organization of Securities Commissions, also known as IOSCO, a position now ably filled by the Commission’s Director of the Office of International Affairs, Ethiopis Tafara. The experience I have had representing the Commission in these institutions has been enlightening. While I, like most people, already understood that we are living in an increasingly interconnected world, serving on IOSCO and the FSB has helped me better appreciate the extent of these connections in the financial system, as well as both the power and the limitations of these international forums.

One of the better-known achievements of IOSCO is how it has increased international cooperation among securities regulators in the area of enforcement. This cooperation has been extraordinarily valuable, facilitating countless Commission cases where crucial evidence rests outside of the United States. Building on this success, we are now establishing cooperative arrangements with other regulators in our supervision program.

…continue reading: International Coordination Among Regulators

The Final Rules for Consolidated Audit Trail

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Friday July 27, 2012 at 9:12 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s statement at a recent open meeting of the SEC, which is available in full here. The views expressed in the post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff. This post relates to the adoption of an SEC rule on consolidated audit trail; the final rule is available here.

I wholeheartedly and unreservedly support the creation of a consolidated audit trail. As someone who has worked at three market regulators for most of her career, I truly appreciate that there is a real need for regulators to have a robust and effective cross-market tracking system that will provide order and trading information in a timely, accurate and consistent manner.

The SEC regulates the largest capital markets in the world, and I am confident that a properly constructed audit trail will arm the Commission with needed information that we –perhaps shockingly– have not had in the past. Among other things, a consolidated audit trail will enable the agency and other regulators to reconstruct trading to determine if the market has been manipulated or if other rules have been broken. It would thus greatly enhance and expedite our examination and enforcement efforts. And, its benefits would inure to our policy efforts as well. For example, a sound, robust consolidated audit trail will enhance our speed and accuracy in determining the cause of significant market events like the May 6th flash crash. These enhanced capabilities will in turn serve to improve our policy responses and restore investor confidence to our markets.

…continue reading: The Final Rules for Consolidated Audit Trail

Using Economic Analysis in SEC Rulemaking

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Friday June 29, 2012 at 11:13 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s recent remarks at the Conference on Current Topics in Financial Regulation, which are available here. The views expressed in the post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

As you may know, the SEC has recently enhanced its economic firepower, through, for example, significantly increasing the number of PhD economists in the Division of Risk, Strategy, and Financial Innovation. Lately much of the external focus on the role of economic analysis at the SEC has been on cost-benefit analysis – which is certainly an important part of economic analysis. However, it is not the only way that the Commission is using economic analysis in our work. Increasingly, our economists are getting involved earlier and more comprehensively in the rulemaking process, not just to help the Commission weigh the ultimate costs and benefits of our regulatory decisions, but to provide a reasoned framework for making those decisions. Examples include providing up-to-date information about the current state of the markets, and helping us think of alternative ways to meet our regulatory goals.

I believe that these efforts are bearing fruit, and I would like to provide a recent example of a significant regulatory action where, in my view, we used economic analysis effectively to guide our decision-making. This was in our adoption of the rule defining “security-based swap dealer” under Title VII of the Dodd-Frank Act, as part of a joint rulemaking with the CFTC. Further defining the term “security-based swap dealer” was one of the many tasks that Congress assigned to us as part of creating a new regulatory regime for security-based swaps. Congress also mandated that the Commission exempt from the dealer designation an entity that engages in a de minimis quantity of dealing activity. Again, however, Congress left it to us to hammer out the details of what would constitute a de minimis level of dealing activity. Considering that the over the counter derivatives market is still a largely unregulated space, determining an appropriate de minimis level seemed like a daunting task, and the comments we received reflected a diversity of views on what this de minimis level should be.

…continue reading: Using Economic Analysis in SEC Rulemaking

The Interrelationship Between Public and Private Securities Enforcement

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Sunday December 11, 2011 at 9:17 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s recent remarks before the FINRA Institute, which are available here. The views expressed in the post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

It should be a fairly non-controversial first principle that a statute is merely a suggestion, rather than a mandate, if it cannot be enforced. Thus, for the federal securities laws to be effective, they need to be enforceable. I am referring to enforcement both by public and quasi-public action, such as that taken by the Securities and Exchange Commission, criminal authorities, state authorities, and self-regulatory organizations like FINRA, and action taken privately by investors in class actions and other litigation.

I believe that both the public and private aspects of securities enforcement are critical, that they complement each other, and that they are interrelated. The Commission as an institution has taken this view for quite a long time—in fact, I wrote more than a few Commission amicus briefs expressing it during my first tour of duty at the agency. Recent court decisions have led me to revisit this topic and to focus anew on the implications of the interrelationship between private and public rights of action.

…continue reading: The Interrelationship Between Public and Private Securities Enforcement

Enhancing Corporate Suffrage Through Proxy Access

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Friday August 27, 2010 at 9:17 am
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Editor’s Note: Elisse B. Walter is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Walter’s statement at a recent open meeting of the SEC, which is available here. The views expressed in the post are those of Commissioner Walter and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff. The post relates to the adoption of a final SEC rule on proxy access; the adopting release is available here. Additional posts relating to proxy access are available here.

While a great many things in our financial markets have changed since the day I first joined the Securities and Exchange Commission in 1977 as a baby lawyer in our Office of General Counsel, one thing has remained the same — shareholders still do not have a real say in determining who will oversee management of the companies they own. A shareholder today exercising her franchise right has no choice among candidates. Yet, voting necessarily assumes a choice.

For far too long, shareholders have been effectively shut out of the director nomination and election process. And, since 1934 when Congress extended proxy authority to the Commission, our proxy rules have failed to facilitate — in fact, have frustrated — shareholders’ efforts to carry out their franchise rights to nominate and elect directors that they select.

…continue reading: Enhancing Corporate Suffrage Through Proxy Access

Testimony Concerning the Discussion Draft of The Financial Stability Improvement Act

Posted by Elisse Walter, Commissioner, U.S. Securities and Exchange Commission, on Friday November 27, 2009 at 12:27 pm
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Editor’s Note: Elisse Walter is a Commissioner of the Securities and Exchange Commission. This post is the written copy of her testimony before the Committee on Agriculture, United States House of Representatives, omitting introductory and concluding remarks. The complete written testimony is available here.

I am pleased to have the opportunity to testify concerning the Discussion Draft of the Financial Stability Improvement Act (Discussion Draft). [1] This legislation, currently being marked-up by the House Financial Services Committee, [2] would make significant changes to the regulation and resolution of large, interconnected financial firms whose disorderly failure might put the financial system at risk.

Lessons from the Recent Financial Crisis

There are many lessons we can learn from the recent financial crisis and events of last fall. In particular, these events demonstrated the need to watch for, warn about, and eliminate conditions that could cause a sudden shock to lead to a market seizure or cascade of failures that put the entire financial system at risk. While traditional financial oversight and regulation can help prevent systemic risks from developing, it is clear that this regulatory structure failed to identify and address systemic risks that were developing over recent years. The current structure was hampered by regulatory gaps that permitted regulatory arbitrage and failed to ensure adequate transparency. This contributed to excessive risk-taking by market participants, insufficient oversight by regulators, and uninformed decisions by investors.

…continue reading: Testimony Concerning the Discussion Draft of The Financial Stability Improvement Act

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