NASAA President Testifies on Future of State Securities Regulation

WASHINGTON (May 8, 2000) – Testifying before the Senate Banking Committee, the nation’s top state securities cop said today that regulators need to “take a fresh look at what they do, how they do it and its impact on industry and consumers” in light of globalization, new electronic technologies and the record number of investors in the stock market.

Bradley Skolnik, Indiana’s securities commissioner and president of the North American Securities Administrators Association¹, said his group is working on a report that “will help guide the future of state securities regulation and how we can make it even more effective and efficient.” Skolnik said NASAA would present its report to the Senate panel after it is completed, later this year.

Skolnik testified Monday morning in Chicago before the Senate Banking Committee, chaired by Senator Phil Gramm (R-TX). Among the other witnesses were Arthur Levitt, chairman of the Securities & Exchange Commission, and William Rainer, chairman of the Commodities Futures Trading Commission.

Skolnik said, “Regulators must strive for flexibility and consistency.” As an example, he pointed to a NASAA task force, chaired by NASAA president-elect Deborah Bortner, director of securities in Washington state, that is looking at ways to streamline state registration of broker-dealer firms.

He pointed to examples where states have streamlined regulation of small stock offerings by local businesses and licensing and registration of stockbrokers. Highlighting the new Web-based Central Registration Depository (CRD) Skolnik said it leverages technology to make the registration process more efficient and “helps regulators focus limited resources on the relatively few bad brokers and firms.”

On other issues, Skolnik supported the move to decimal pricing of securities at the earliest practical time. He urged caution as regulators wrestle with market structure issues. “It seems to me,” Skolnik said, “regulators probably shouldn’t be attempting to be the architects of the new marketplace; the risk of unintended consequences is too great. Instead, regulators should focus on insuring that markets are well-regulated and that customers are treated fairly.” Skolnik’s testimony is available on the NASAA website at www.nasaa.org.

¹ NASAA, the oldest international organization devoted to investor protection, was organized in 1919. It is a voluntary association with a membership consisting of the 66 state, provincial and territorial securities administrators in the 50 states, the District of Columbia, Canada, Mexico and Puerto Rico. In the U.S., NASAA is the national voice of the 50 state securities agencies responsible for investor protection and the efficient functioning of the capital markets at the grassroots level.

2000 Headlines, Newsroom