Securities Regulation Daily Wrap Up, SEC NEWS AND SPEECHES—At SEC Speaks Conference, Walter Says SEC Must Not Lose Sight of Individual Investors, (Feb 22, 2013)

By John Filar Atwood

SEC Chair Elisse Walter kicked off the annual SEC Speaks conference by reminding regulators and industry participants even as they work to reduce the systemic challenges illuminated by the financial crisis, they must also try to minimize risks for individual investors. This requires regulation that is focused on detecting and preventing fraud, deterring market manipulation and ensuring that investors have the information they need to make informed investment decisions, she said in her opening remarks.

Regulation also must support investor confidence in the architecture and technology of the exchanges and other large players in the markets, she said. She noted that the Commission has demonstrated its commitment to this idea by approving strict market access rules, more effective circuit breakers and more sophisticated limit-up, limit-down strategies. She called on the SEC to continue to push for improvements to the technology of the exchanges by moving forward on a regulation that will mandate minimum system compliance and integrity, including appropriate testing and reporting.

Walter acknowledged that investment necessarily involves some risk. “As we work to reduce systematic risk, we don’t want to prevent all risk taking,” she said. The dynamism that drives real market growth comes from people that are willing to take risks, both entrepreneurs and the investors that support them. However, they will not take risks if they are not confident that they will be protected from fraud and market abuse, she noted.

She said that recent data suggests that regulators are successfully walking the line between increasing systemic regulation and allowing for appropriate risk taking. Data compiled by the SEC’s Division of Risk, Strategy and Financial Innovation indicates that for the first time since the financial crisis, the amount of money raised in public debt and equity offerings is rising—up 22% in 2012.

RegulatoryActivity: SECNewsSpeeches