While the nation voted to keep President Obama in office for a second term, things will look differently at the top of the Securities and Exchange Commission (SEC) starting next month. Yesterday, President Obama stated he intends to appoint Elisse Walter as the new Chair of the SEC following the announcement of current Chair Mary Schapiro’s stepping down, which will take place on December 14.
With the implementation of the JOBS Act and its regulations in sight, Walter has a rather large torch to carry, but many are optimistic about her leadership. According to Karen Kerrigan, the head of the Small Business and Entrepreneurship Council, Walter represents a change of pace in the SEC with regards to crowdfunding, which she observes as not having been so keenly embraced under Schapiro’s direction.
“Perhaps new leadership – even if it is an interim leader – will breathe some enhanced productivity and energy into the SEC’s work,” Kerrigan said. “At the staff level, the SEC is very engaged on JOBS Act provisions, and with the right signal and leadership I think the process can accelerate.”
Candace Klein, co-chair of the Crowdfund Intermediary Regulatory Advocates (CFIRA),agrees that Walter will be a constructive force for crowdfunding: “We think she will be a very strong person in this position. Commissioner Walter has been open to listening to the industry, she has been willing to meet with us, and we’re excited to work with her. This is very positive for us.”
Walter’s credentials also lend themselves to confidence by many with regard to her potential on the job. Having served as commissioner at the SEC, as senior executive vice president for regulatory policy and programs at the Financial Industry Regulatory Authority (FINRA), and the same position at FINRA’s preceding organization, the National Association of Security Dealers, Walter has ample experience in the regulatory process.
At the SEC Government-Business Forum on Small Business Capital Formation earlier this month, Walter expressed confidence about the SEC’s ability to fine-tune the pathways for both greater investor security and small business benefits:
“People often frame this discussion as “balancing” the desire for easier capital formation against the need for investor protection. But I see this as presenting a false choice, and I hope that you do as well. A vital prerequisite to efficient capital formation is a market in which investors have confidence. If allowing general solicitation results in increased incidence of fraud or sales of securities to investors that do not have the sophistication to understand the risks and merits of a particular investment, we will have failed not only investors, but small businesses as well. In other words, regulations that protect against these risks — without placing undue burdens on businesses — will benefit all participants in the capital markets. On the other hand, we should not block this change because we are afraid that harm will result; it is the responsibility of regulators (and market participants as well) to determine how to obtain the benefit of the change while safeguarding against the downside risks to investor protection and the public interest.”
A close follower of Schapiro during her years at the SEC and FINRA, Walter is not expected to deviate much from her predecessor’s modus operandi in the larger context of the SEC’s work. However, with a renewed enthusiasm for the potential of crowdfunding, Walter presents a promising new chapter in the field, and we hope that much will be achieved before her term ends in December 2013.
This post was written by James Han on December 1, 2012
New Leadership, Renewed Hope