Ten to Watch 2010-2011: The Insider
sponsored by:
Elisse B. Walter
Elisse B. Walter
AGE: 60
POSITION: SEC Commissioner
LOCATION: Washington, D.C.
EDUCATION: B.A., mathematics, Yale University; J.D., Harvard Law School.
The final shape of Wall Street reform has now fallen to the SEC, with Congress having passed many of the biggest policy decisions along to the regulator under the new Dodd-Frank law. While Chairman Mary Schapiro will clearly lead this effort as the head of the organization, Elisse B. Walter is arguably the Commissioner who will have the biggest influence on Schapiro's thinking and on subjects that are close to the hearts of stockbrokers and investment advisers.
Having worked closely with Schapiro for the past 16 years at the SEC, the CFTC and NASD, Walter certainly has the commissioner's ear, say industry insiders. In fact, because of their history together, the two often “instinctively,” take the same position on issues, Walter said in interview with Registered Rep. Some say Walter's 12 years at FINRA, the broker/dealer SRO, give her a broker/dealer- and SRO-friendly view of what a harmonized regulatory system for broker/dealers and investment advisers should look like.
Walter would prefer the word “balanced.” She thinks both regulatory regimes leave room for improvement and hopes they can meet in the middle. Investment advisers could use more preventive and rules-based regulation, while brokers would benefit from stricter principles-based regulation, like adherence to the fiduciary standard. Indeed, Walter has long been a vocal supporter of extending a fiduciary standard to broker/dealers and their reps, and says that fiduciary standard should be of the highest order. “If you are recommending products, you should be held to the fiduciary standard,” she said.
She also champions the SRO model, a controversial topic for investment advisers. SROs can act more swiftly than government regulators, and would increase resources for firm examinations without burdening the taxpayer, she says. But of course, any SRO for investment advisers would have to be staffed with people who have investment adviser expertise, she added.
“She will play a big role in pushing staff members and the commission as a whole to look at the practical business application of new rules, in terms of fiduciary duty, disclosures rules,” says Kristina Fausti, director of legal and regulatory affairs at Fi360.
