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U.S. Securities and Exchange Commission

Speech by SEC Chairman:
Remarks Before the Financial Stability Oversight Council Meeting


Chairman Mary L. Schapiro

U.S. Securities and Exchange Commission

Washington, D.C.
July 18, 2011

After one year, it’s already clear that the Dodd-Frank Act is reshaping the regulatory landscape, filling gaps, reducing systemic risk, and helping to restore confidence in the financial system. And it is beginning to strengthen the financial system so it is less prone to a financial crisis.

In the specific area of securities, Dodd-Frank will have a significant impact. It brings hedge fund advisers under the regulatory umbrella, creates a new whistleblower program, establishes an entirely new regime for the over-the-counter derivatives market, enhances the SEC’s authority over credit rating agencies, provides for specialized corporate disclosures, and heightens regulation of asset-backed securities — among other things.

Although there is much to do to fully implement the law, we at the SEC have already established a program to incentivize insiders to bring us information about financial fraud. We have already established the process to require hedge fund and other fund advisers to register with the SEC and be subject to our rules. We have already taken advantage of an array of new enforcement tools to pursue fraud. And we have proposed virtually all of the rules necessary to build the regulatory structure for the security-based swaps market.

To help fulfill the Act’s promise, the SEC was tasked with writing a large portion of the rules and, over the past year, we have accomplished a great deal. Of the more than 90 mandatory rulemaking provisions, the SEC already has proposed or adopted rules for three-quarters of them (nearly 70). And this does not include additional rules stemming from the dozens of other provisions that give the SEC discretionary rulemaking authority.

The rules we’ve proposed and adopted have been strengthened because of the process we’ve put in place. We have increased transparency and made it easier for the public to provide input. And we have forged a collaborative relationship with other federal and international regulators.

It is so important that we not forget the harm that the financial crisis inflicted upon our economy and our people, or ignore its lessons. That is one of the reasons it will be critical that all the regulators receive the appropriate funding to be able to fully implement this law and further protect investors — as the law intended.

So after one year, I’m pleased with our progress and I’m looking forward to an even busier year to come.



Modified: 07/18/2011