The Securities and Exchange Commission is the federal agency in charge of enforcing government regulations on corporations, businesses, and the financial sector. It is well known in business. Many members of higher management like CFOs, CEOs, and COOs pay attention to the SECs actions.
The SEC is the primary determiner of how strict and forceful the government will be when it comes to enforcing regulations, and this is something in which all businesses have to be cognizant. With the 2012 election finished and Barack Obama sealing a second term, changes in his cabinet and other federal positions have started and the SEC is getting a new head.
Schapiro Out, Elisse Walter In
Next month, a new chairman will be in charge of the SEC in Washington. Mary Schapiro, who headed the agency through the 2008 crisis, will be replaced by Elisse Walter, an SEC commissioner. The current understanding of the switch from outsiders and analysts is that Walter will follow the same direction Schapiro did.
Currently, the SEC is pursuing stricter regulation and enforcement of money-market funds through the Volcker Rule, which primarily affects banks. Ultimately, though, the administration’s appointees to the SEC have been relatively security friendly.
There is some criticism that Schapiro failed to act quickly and aggressively enough to go after head bankers responsible for some of the policies that led to the financial collapse. There may be some pressure for Walter to be more vigilant in that respect.
Other criticisms of Schapiro come from her handling of the Madoff scandal that rocked the investment world during the financial crisis. Her choice of individuals to handle the case was questionable, and she eventually apologized for that.
Ultimately, Schapiro worked hard to try to put some teeth back into the SEC after the financial crisis forced the public to ask what the agency’s involvements. With Walter already set through 2013, the official appointment will not come until after the end of next year. He appears to be someone who will steer the SEC in the same direction it has been heading.
It looks as if the SEC will slowly become more powerful in regulating and enforcing laws in the financial and securities sectors of the US. It doesn’t appear that any of these steps will happen too quickly, especially with lobbying and a shaky economy to protect. Don’t expect much to change in the near future that executives won’t have time to prepare for and handle.