Congress should allow the Securities and Exchange Commission to set capital standards for large broker-dealer holding companies not affiliated with banks and to examine and obtain information about their affiliates, the director of the SEC's trading and markets division said yesterday.

Lawmakers also should consider ensuring that these broker-dealer holding companies have an emergency liquidity provider, which would have to be some other entity than the SEC, Erik Sirri told members of the Senate Banking Committee's securities panel at a hearing on federal risk management.

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