Marc Lackritz, president of the Securities Industry Association, testified before the Senate Committee on Banking, Housing and Urban Affairs this week, calling for reform of the Self-Regulating Organizations within the industry.
Lackritz said self-regulation presents a blatant conflict of interest. The SRO is forced into wearing “two hats” he said, playing market operators and regulators.
He also said the regulatory inefficiencies result from duplication among SROs.
“To address these deficiencies, we support consolidation of the broker-dealer regulatory functions for firms that are regulated by both the NYSE and the NASD,” Lackritz told Congress. “This consolidated self-regulatory structure eliminates conflicts of interest and regulatory duplication. In addition, a single, principles-based rulebook would strengthen investor protection and the competitiveness of our markets.”
Lackritz also called for a consolidated rule book with one set of interpretations, examinations and one organization.