The U.S. Securities and Exchange Commission is the chief regulator of exchanges, broker-dealers, investment advisers and mutual funds. It operates four divisions: Corporation Finance, Enforcement, Investment Management, Trading and Markets, and Risk, Strategy and Financial Innovation. Based in Washington, D.C., the SEC has 11 regional offices throughout the U.S.
Mary Schapiro took over as chairman in 2009 from Christopher Cox. She has a full plate. The U.S. financial-services industry is poised for a massive regulatory overhaul following the financial meltdown and the Bernard Madoff Ponzi scheme, among others. The regulator has been criticized for its failed oversight of Wall Street and may lose some of its powers. The Obama administration has been planning a new consumer-protection agency, which suggests turf battles that are likely to lie ahead. The SEC is one of the federal agencies most at risk in the regulatory revamp under study by the administration and Congress, according to The Wall Street Journal.
The agency is overhauling the enforcement division, carving out five special units with the aim of turning some employees into specialists. The units are: asset management (covering mutual funds, hedge funds, private-equity firms, investment advisers and investment companies); market abuse (such as insider trading); structured and new products; foreign corrupt practices; and municipal securities and public pensions. The SEC also recently created the RiskFin division and the Office of Market Intelligence to handle tips and referrals. It's also creating a group for inspecting clearing agencies.
The agency's goals face substantial hurdles in the form of constrained budgets and aging technologies.
The SEC has enacted tougher trading rules for its employees. The rules prohibit staff from trading securities of companies under SEC investigation regardless of whether employees have personal knowledge of the investigation. The rules were put in place after two of the SEC’s enforcement lawyers came under investigation by federal prosecutors and the Federal Bureau of Investigation for possible insider-trading violations, according to The Wall Street Journal.
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