SIA Proposes One Regulator

The SIA board of directors in March endorsed the idea of one SRO. It recommends the creation of a new regulator to supervise sales practices and operational requirements, while each stock market oversees its own trading and listing activities.In January, an SIA committee white paper floated six different regulatory models (see April 2000 RR, Page 40), from which the board selected the single regulator

The SIA board of directors in March endorsed the idea of one SRO. It recommends the creation of a new regulator to supervise sales practices and operational requirements, while each stock market oversees its own trading and listing activities.

In January, an SIA committee white paper floated six different regulatory models (see April 2000 RR, Page 40), from which the board selected the single regulator structure. One SRO would be more efficient, the brokerage trade group says, and would reduce the conflicts of interest that arise when the NYSE or NASD oversee trading systems that compete with the Big Board or Nasdaq.

The SIA submitted its recommendation to the SEC. According to an SEC spokesperson, the agency is reviewing the idea, and has not stated whether or when it may act on it.

But Alan Davidson, president of the Independent Broker-Dealer Association in Smithtown, N.Y., says one monolithic regulator would be "a disaster." He claims it would disenfranchise small broker/dealers.

"This is contrary to the intent of Congress in creating the Maloney Act, which was established for the purpose of getting the small guys [together to create] self regulation," Davidson says.

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