The current economic crisis has led to increasing calls for fundamental changes to the financial regulatory structure of our nation. Such changes could have a profound impact upon the Securities and Exchange Commission and how it operates. NTEU leadership is currently working to ensure that SEC employee rights and benefits will be protected as these plans unfold in Washington. Union leaders have reached out to incoming SEC Chairman Mary Schapiro, House Financial Services Chairman Barney Frank (D-Mass.), Senate Banking Committee Chairman Chris Dodd, and members of the Obama transition team to discuss SEC issues.
President-Elect Obama recently stated during an interview on CNBC that he plans “a substantial overhaul” of financial regulation, including “better enforcement, better oversight, better disclosure, increased transparency.” He went on to say that, “We’re going to have to look at this alphabet soup of agencies and figure out how do we get them to work together more effectively. We’ve got to stop splintering functions in such a way that capital in one form is treated one way and capital in another form is treated another way, because these days in global financial markets, they’re all fungible.”
One proposal that has been gathering momentum is the possible merger of the Commodity Futures Trading Commission (CFTC), which regulates the commodity futures and options markets, into the SEC. Many securities fall under the jurisdiction of both agencies, leading to overlapping regulation, and a merger has been discussed in Washington for many years. New SEC Chairman Mary Schapiro previously served as the Chairman of CFTC, and she also presided over the merger of NASD and the New York Stock Exchange. Her nomination could signal a possible merger of the two agencies.
House Financial Services Committee Chairman Frank will have a key leadership role in crafting any new regulatory scheme and shepherding it through Congress. Chapter 293 enjoys a good working relationship with the Chairman. During a recent meeting with Chapter 293 President Greg Gilman earlier this month, Chairman Frank stated that he favors an approach that would separate the functions of investor protection from protection against systemic risk. Under such a model, an enhanced SEC, perhaps combined with the CFTC, could continue to serve in its role as the watchdog for investor protection, with improved regulatory authority and beefed up resources and personnel. Chairman Frank visited the SEC at the union’s invitation a year ago to speak to frontline employees, and we hope that he will be returning soon.
Chapter 293 will continue to keep you apprised of developments regarding the SEC’s future. Thank you to all of the SEC employees who have joined the union, without whom agency employees would not have a voice in Washington.