The SEC’s Mary Jo White has taken a hardline approach since her appointment as chairman earlier this year.
White has pushed the Commission to seek admission of wrongdoing in cases, upending the SEC’s longstanding policy of letting bigwigs off with a financial slap on the wrist but no real acknowledgment of guilt.
Now, after a spate of high profile glitches on the stock exchange, White has brought into question whether exchanges should continue to “self-regulate,” The Wall Street Journal’s Andrew Ackerman, Scott Patterson, and Jacob Bunge report:
The SEC chairman said the self-regulatory function of stock and options exchanges “has encountered challenges” in recent years as the trading venues have evolved into for-profit enterprises that compete more directly with brokerages. She added that “the current nature of exchange competition and the self-regulatory model should be fully evaluated in light of the evolving market structure and trading practices.”
The SEC should review whether the oversight of exchanges “continues to meet the needs of investors and public companies,” Ms. White said. The comments reflect her first major public foray into market-structure issues since she took charge of the SEC in April.
According to the Journal, so-called “dark pools” (private trading venues under less scrutiny) traded 38% of all shares. The growth of “opaque markets” has hurt the bottom line of exchanges, which make revenue off of executing buy and sell orders.
“The review could result in a move to strip exchanges of some current responsibilities. It also could lead to tighter regulation for the private venues, which could benefit exchanges,” the Journal reported.