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Regulatory Reform Proposal Leaves SEC Unchanged

WASHINGTON — The financial markets regulatory reform plan that the Obama administration is to propose Wednesday does not include changes to the structure or jurisdiction of the Securities and Exchange Commission, or to  self-regulatory organizations that operate under it such as the Municipal Securities Rulemaking Board, a senior administration official said in a background briefing with reporters Tuesday night.

In addition, the official said that the creation of a consumer financial protection agency, which the administration also plans to propose, would not entail altering the SEC’s responsibility for investor protection.

“The consumer agency would not have authority over SEC-regulated products and services,” the official said. “The SEC and the new consumer agency would coordinate with each other to ensure that there are no gaps between investor and consumer protection coverage and we anticipate that that will keep both agencies strong and focused on their core mission.”

The official provided a broad outline of the plan that is organized into five primary areas, many of which have already been leaked by the administration in recent days ahead of Wednesday's proposal.

One area includes stronger oversight of financial firms, in part through a financial services oversight council chaired by the Treasury Department.

The other four include: strengthening of regulations in “core” markets such as derivatives; boosting consumer protections for financial products like mortgages and credit cards; giving the government additional tools to reduce the impact on the economy when large, interconnected firms fail; and the broad establishment of global regulatory standards.
 
Asked whether the plan entailed any changes to SROs, the official said: “Our plan does not change basic jurisdiction and structure of the SEC so we do not address that in this plan.”

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