SEC seeks new act for securities
THE chair of the US Securities and Exchange Commission (SEC) yesterday said that new legislation should be introduced to regulate asset backed securities, which were blamed for contributing to the financial crisis.
Speaking at an industry conference, Mary Schapiro branded the rules that regulate asset-backed securities (ABS) “outdated” and called for a whole new act to be introduced.
“I believe legislative action is… necessary to deal with some of the issues that have been highlighted by the credit crisis,” she said.
Many securities laws date back to the 1930s Depression, before securities backed by assets such as mortgages and credit cards were ever sold.
Schapiro said the act was necessary because amendments to current laws would not go far enough to address current issues over disclosure.
Meanwhile, Goldman Sachs has sent a memo to the SEC defending anonymous trading venues known as “dark pools”, saying that they are a technological evolution that have benefited institutional and retail trading by bringing down transaction costs.
Last week, the SEC voted unanimously to find ways to make dark pools more transparent, such as revealing the electronic trading messages that are sent to a limited group of market participants.
But Goldman said that the investment community has benefited from the evolving market structure.