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when CFTC & SEC will be merged or one supper agent will be created for futures/stocks
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http://lawprofessors.typepad.com/business_law/government_and_busines/index.html
Treasury's New Plan
By now most have in the financial community have digested the details of Sec. Paulson's grand plan to reorganize federal financial regulations in the country. The plan augments the power of the Federal Reserve Board to step in when there is a financial crisis. The plan establishes three agencies with different task -- one to regulate the stability of the market, another to regulate financial market competition, and yet another to protect investors. Part of the plan is, for example, a merger of the SEC and CFTC. Hidden in the plan are proposals to lighten regulation -- for example, a proposal to lighten regulation of securities exchange rules on listings. This plan has no chance of approval -- it is too complex, upsets too many apple-carts, and appears in an election year and a year in which the economy is staggering. Why propose it then? Simple. What makes the knees shake of government officials, even those that favor market based solutions over government based solutions to economic cycles, is getting condemned in the history books as having done "nothing" while the people suffer. This plan is a CYA for Paulson. He can claim to have done "something" to solve our economic problems. The proposal of the plan itself is an illustration as to why government ought not have the power the plan gives the FED. There is too much pressure on government officials in a downturn to "do something" and that pressure, more often than not, leads to counterproductive actions. It is well known that Herbert Hoover should not be criticized for doing nothing during the early days of the depression; he should be criticized for doing stupid things in response to pressure -- increasing tariffs and increasing taxes. The plan, increasing the power of the Fed in crisis times, is likely to lead to more problems than corrections.
Treasury's New Plan
By now most have in the financial community have digested the details of Sec. Paulson's grand plan to reorganize federal financial regulations in the country. The plan augments the power of the Federal Reserve Board to step in when there is a financial crisis. The plan establishes three agencies with different task -- one to regulate the stability of the market, another to regulate financial market competition, and yet another to protect investors. Part of the plan is, for example, a merger of the SEC and CFTC. Hidden in the plan are proposals to lighten regulation -- for example, a proposal to lighten regulation of securities exchange rules on listings. This plan has no chance of approval -- it is too complex, upsets too many apple-carts, and appears in an election year and a year in which the economy is staggering. Why propose it then? Simple. What makes the knees shake of government officials, even those that favor market based solutions over government based solutions to economic cycles, is getting condemned in the history books as having done "nothing" while the people suffer. This plan is a CYA for Paulson. He can claim to have done "something" to solve our economic problems. The proposal of the plan itself is an illustration as to why government ought not have the power the plan gives the FED. There is too much pressure on government officials in a downturn to "do something" and that pressure, more often than not, leads to counterproductive actions. It is well known that Herbert Hoover should not be criticized for doing nothing during the early days of the depression; he should be criticized for doing stupid things in response to pressure -- increasing tariffs and increasing taxes. The plan, increasing the power of the Fed in crisis times, is likely to lead to more problems than corrections.
http://www.reuters.com/article/governmentFilingsNews/idUSN1255649420071113
WASHINGTON, Nov 13 (Reuters) - Merging the U.S. Securities and Exchange Commission with the Commodity Futures Trading Commission would not make U.S. markets more competitive because the regulators oversee two completely different areas, a CFTC commissioner said on Tuesday.
"You could put us both in the same building, but we would still have two different sets of laws to carry out, two different sets of regulatory responsibilities, and two different congressional mandates," Bart Chilton said in prepared remarks to be delivered before the Futures Industry Association in New York.
The CFTC was set up to regulate futures and options and the SEC was established to handle stocks. However, there have been calls to streamline the agencies as technology and cross-ownership increasingly intertwine the two markets.
SEC Chairman Christopher Cox has said he would support anything Congress can do to rationalize the regulation of products competing against each other. Lawmakers have called on congressional investigators to examine the overlap between the two federal agencies.
Most recently, the U.S. Treasury Department asked the public to comment on a blueprint to streamline financial services regulations.
However, Chilton said it does not make sense to marry the two agencies as they approach regulation differently.
The CFTC has adopted a principles-based approach to regulation, he said, while the SEC's approach is prescriptive and rules-based.
"All too often, prescriptive rules and regulations don't anticipate potential issues, or ... they go too far and over-prescribe solutions to problems that don't exist," Chilton said, adding that principles-based rules allow the CFTC or the market to select the "right" regulatory tool for the job.
"The SEC doesn't approach things that way because that's not their regulatory system, and it would be mistake to lose the flexibility the CFTC has by merging it with the SEC."
Chilton said that the agencies could improve communication and "harmonize" their approval processes to avoid unnecessary delays. When asked if the agencies had started to work on such a process, Chilton said they had not set up a formal structure, but hoped to do it as soon as possible.
He said legislation may be needed to resolve some of the jurisdictional issues, but that the focus should be to resolve the problems created by the agencies' different statutes and mandates, not by "putting those problems under one roof." (Reporting by Rachelle Younglai; Editing by Brian Moss)
WASHINGTON, Nov 13 (Reuters) - Merging the U.S. Securities and Exchange Commission with the Commodity Futures Trading Commission would not make U.S. markets more competitive because the regulators oversee two completely different areas, a CFTC commissioner said on Tuesday.
"You could put us both in the same building, but we would still have two different sets of laws to carry out, two different sets of regulatory responsibilities, and two different congressional mandates," Bart Chilton said in prepared remarks to be delivered before the Futures Industry Association in New York.
The CFTC was set up to regulate futures and options and the SEC was established to handle stocks. However, there have been calls to streamline the agencies as technology and cross-ownership increasingly intertwine the two markets.
SEC Chairman Christopher Cox has said he would support anything Congress can do to rationalize the regulation of products competing against each other. Lawmakers have called on congressional investigators to examine the overlap between the two federal agencies.
Most recently, the U.S. Treasury Department asked the public to comment on a blueprint to streamline financial services regulations.
However, Chilton said it does not make sense to marry the two agencies as they approach regulation differently.
The CFTC has adopted a principles-based approach to regulation, he said, while the SEC's approach is prescriptive and rules-based.
"All too often, prescriptive rules and regulations don't anticipate potential issues, or ... they go too far and over-prescribe solutions to problems that don't exist," Chilton said, adding that principles-based rules allow the CFTC or the market to select the "right" regulatory tool for the job.
"The SEC doesn't approach things that way because that's not their regulatory system, and it would be mistake to lose the flexibility the CFTC has by merging it with the SEC."
Chilton said that the agencies could improve communication and "harmonize" their approval processes to avoid unnecessary delays. When asked if the agencies had started to work on such a process, Chilton said they had not set up a formal structure, but hoped to do it as soon as possible.
He said legislation may be needed to resolve some of the jurisdictional issues, but that the focus should be to resolve the problems created by the agencies' different statutes and mandates, not by "putting those problems under one roof." (Reporting by Rachelle Younglai; Editing by Brian Moss)
http://www.reuters.com/article/ousiv/idUSTRE49N0MY20081024
WASHINGTON (Reuters) - The chairman of the U.S. Securities and Exchange Commission said on Thursday he "strongly" supported a merger between his agency and the Commodity Futures Trading Commission.
SEC Chairman Christopher Cox said a select committee on financial services regulatory reform should be appointed and should explore the merger of the two agencies.
"It could tackle the challenge of merging the SEC and the CFTC, which I strongly support," Cox said during testimony before a Congressional hearing. "This would bring futures within the same general framework that currently governs economically similar securities."
Cox's comments mark the first time he has publicly supported such a merger. His remarks echo recommendations from U.S. Treasury Secretary Henry Paulson who stated in his regulatory reform blueprint in March that the SEC -- the U.S. markets watchdog -- should merge with the CFTC, which is charged with overseeing the activities of the nation's futures market.
Such a merger has been proposed for years, but jurisdictional battles among lawmakers have prevented the idea from gaining much traction.
The SEC and CFTC in March signed an agreement to increase cooperation between the agencies and streamline the approval process for new products.
While the regulators' responsibilities were once clear cut, the lines have blurred as technology and cross-ownership increasingly intertwine the two markets.
The memorandum established a permanent liaison between the agencies, requires staff from both agencies to meet every quarter and sets up a framework for sharing information.
Cox said on Thursday that split legislative jurisdictions have created gaps among financial regulation. "This long-running turf battle is one of the reasons that credit default swaps aren't regulated," he said.
Cox, who has headed the SEC since August of 2005, on Thursday reiterated pleas to give the SEC authority to regulate the fast-growing $55 trillion credit default swap market, which has been blamed for exacerbating the financial meltdown.
Used to insure against bond default risk, swaps are so large and their terms are so poorly understood that they played a key role in freezing up the credit markets.
(Reporting by Karey Wutkowski and Rachelle Younglai)
WASHINGTON (Reuters) - The chairman of the U.S. Securities and Exchange Commission said on Thursday he "strongly" supported a merger between his agency and the Commodity Futures Trading Commission.
SEC Chairman Christopher Cox said a select committee on financial services regulatory reform should be appointed and should explore the merger of the two agencies.
"It could tackle the challenge of merging the SEC and the CFTC, which I strongly support," Cox said during testimony before a Congressional hearing. "This would bring futures within the same general framework that currently governs economically similar securities."
Cox's comments mark the first time he has publicly supported such a merger. His remarks echo recommendations from U.S. Treasury Secretary Henry Paulson who stated in his regulatory reform blueprint in March that the SEC -- the U.S. markets watchdog -- should merge with the CFTC, which is charged with overseeing the activities of the nation's futures market.
Such a merger has been proposed for years, but jurisdictional battles among lawmakers have prevented the idea from gaining much traction.
The SEC and CFTC in March signed an agreement to increase cooperation between the agencies and streamline the approval process for new products.
While the regulators' responsibilities were once clear cut, the lines have blurred as technology and cross-ownership increasingly intertwine the two markets.
The memorandum established a permanent liaison between the agencies, requires staff from both agencies to meet every quarter and sets up a framework for sharing information.
Cox said on Thursday that split legislative jurisdictions have created gaps among financial regulation. "This long-running turf battle is one of the reasons that credit default swaps aren't regulated," he said.
Cox, who has headed the SEC since August of 2005, on Thursday reiterated pleas to give the SEC authority to regulate the fast-growing $55 trillion credit default swap market, which has been blamed for exacerbating the financial meltdown.
Used to insure against bond default risk, swaps are so large and their terms are so poorly understood that they played a key role in freezing up the credit markets.
(Reporting by Karey Wutkowski and Rachelle Younglai)