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SEC mulls single regulator
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September 21, 1999: 4:15 a.m. ET
Report: watchdog's chairman evaluating plan to combine self-regulators
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LONDON (CNNfn) - The U.S. Securities and Exchange Commission, spurred by the rapid spread of electronic-based stock trading, is considering scrapping the current system of self-regulatory stock-market bodies in favor of a single national regulator for the nation's exchanges, according to a published report.
SEC chairman Arthur Levitt is currently reassessing the current system under which each exchange regulates itself, the Wall Street Journal reported Tuesday.
The re-evaluation is aimed at responding to the sudden proliferation of Internet-based trading networks, as well as crystallizing plans by major exchanges such as Nasdaq and the New York Stock Exchange to transform themselves into for-profit enterprises, the newspaper said.
Levitt, criticized by some market players as slow to react to the new trading technologies, is expected to unveil his vision for a unified regulatory framework in a major speech Thursday, the newspaper said.
The themes of the speech reportedly emerged in a series of interviews conducted by the Journal with Levitt, his senior policy officials and an informal advisory group consisting of leaders in industry and on Wall Street.
"We have an opportunity now that I don't think we'll have again in our lifetime to come closer to the vision of a national market system that, in my judgment, has been too long delayed," Levitt told the newspaper.
Levitt has reportedly been soliciting advice on policy changes over the past several months from a small phalanx of advisers including former Treasury Secretary Robert Rubin and investment guru Warren Buffett.
The discussions were prompted in part by the proliferation of electronic communications networks, or ECNs. These are Internet-based quasi-exchanges that allow equity players to swap stocks without having to rely on a market middleman, such as the Nasdaq.
Because ECNs exist in a virtual world of electronic trade executions, they have little by way of overheads and few employees.
This makes cooperation among networks easier: last week, seven ECNs - including Bloomberg Tradebook, Archipelago and Reuters' Instinet unit - agreed to share access to information including quotes and after-hours trade.
Levitt has previously informed the New York Stock Exchange and Nasdaq that he wants a clear separation of their market operations and regulatory bodies before they can gain approval for plans to become for-profit companies, the newspaper reported.
--from staff and wire reports
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