NASAA Urges Support for Murray Amendment to Include State Securities Regulator on Financial Stability Oversight Council

WASHINGTON (May 4, 2010) – North American Securities Administrators Association (NASAA) President and Texas Securities Commissioner Denise Voigt Crawford sent the following letter to each member of the U.S. Senate urging support for an amendment to the Restoring American Financial Stability Act to be proposed by Sen. Patty Murray (D-WA) to include a state securities regulator on the Financial Stability Oversight Council. The text of the letter is below. The letter also is available on the NASAA website here.

May 3, 2010

The Honorable Patty Murray
United States Senate
173 Russell Senate Office Building
Washington, DC 20510

RE: Support for the Murray Amendment #3754 to S. 3217, the Restoring American Financial Stability Act of 2010

Dear Senator Murray:

On behalf of NASAA, I want to express our support for your proposed amendment to include a state securities administrator on the Financial Stability Oversight Council included in Section 111 of the Restoring American Financial Stability Act of 2010. This would mirror the provision included in the House bill, the Wall Street Reform and Investor Protection Act of 2009.

We agree that the responsibility of identifying and managing systemic risk should not be assigned to a single agency but, instead, should be the responsibility of a council comprised of state and federal regulators. Like you, we believe this approach provides for the assurance of success in evaluating and controlling systemic risk in the marketplace. By formalizing regulatory cooperation and communication among state and federal regulators, the oversight of our intertwined financial markets will be infinitely more effective.

While the bill proposes this essential Financial Stability Oversight Council, representatives of state securities administrators, state insurance commissioners, and state banking supervisors have not been included as members of the Council. A state securities regulator would bring to the Oversight Council the insights of a team of “first responders” who see trends developing at the state level, which have the potential to impact the larger financial system.

Because we are closest to the investing public, state securities regulators are often first to identify new investment frauds and to bring enforcement actions to halt and remedy a wide variety of market wide investment related violations. The $61 billion returned to investors to help resolve the demise of the Auction Rate Securities (ARS) market is the most recent example of the states being the first to uncover and later work with their federal counterparts to develop a collaborative approach to a national problem.

In conclusion, I believe a Financial Stability Oversight Council must have representation from all three major sectors of state financial regulation, including a state securities administrator, to create an entity with access to relevant information regarding the accumulation of risk in our financial system. NASAA supports the Murray amendment to S. 3217 and looks forward to continuing to work with you as the bill moves through the legislative process.


Denise Voigt Crawford
Texas Securities Commissioner and
NASAA President

cc: U.S. Senate

For more information:
Bob Webster, Director of Communications

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