June 27 (Bloomberg) -- Two U.S. Senate staff members nominated to join the Securities and Exchange Commission said today the agency should focus on finishing rules mandated by Congress.
Kara M. Stein, a Democrat, and Michael Piwowar, a Republican, told the Senate Banking Committee the SEC must complete the required rulemaking, much of it a response to the financial crisis, even as it studies how to address an evolving and complex electronic market for equities trading.
“We need to pursue all of those things at one time,” said Stein, who has worked as a top policy aide to Senator Jack Reed of Rhode Island.
Stein and Piwowar would join the SEC as it adapts to a new agenda under Chairman Mary Jo White, who says the agency’s rulemaking priorities are prescribed by the Dodd-Frank Act of 2010 and the Jumpstart Our Business Startups Act of 2012. The SEC is preparing to vote on rules that would allow equity crowdfunding and advertising for investors by hedge funds. Both rules are required by the Jobs Act.
“I will definitely work with Chair White who sets the rulemaking agenda for the SEC to make sure that priorities are placed on rulemaking that is mandated under the Jobs Act and the Dodd-Frank Act,” Piwowar told the committee.
Piwowar said the SEC also could move forward on a pilot program to test widening the minimum price increment at which some small stocks are quoted. Advocates of the change say it would boost trading interest in less liquid stocks by providing more incentives for market makers who facilitate orderly trading.
Stein would replace Elisse B. Walter as a Democratic commissioner and Piwowar would succeed Troy A. Paredes as a Republican appointee on the five-member commission that oversees U.S. capital markets. Stein has served as a top aide to Reed, a Democrat, and Piwowar has been chief Republican economist on the Senate Banking Committee.
The nominations of Stein and Piwowar are uncontroversial, and both are expected to win Senate confirmation, possibly as soon as July. The committee will vote on their nominations at a future hearing.
“Kara and Mike are familiar faces on this side of the dais, and I wish them all the best,” said Senator Tim Johnson, the South Dakota Democrat who leads the banking committee.
Senators reserved most of their questions at the hearing for Representative Mel Watt, a North Carolina Democrat who has been nominated to head the Federal Housing Finance Agency. Watt faces opposition from Republicans who say they prefer a technocrat, rather than a politician, to run FHFA.
Stein, 49, served as staff director of a Senate securities and insurance subcommittee that Reed led from 2009 to 2013. After Reed left the post, Stein moved to his personal office as a senior policy adviser and legal counsel. She holds undergraduate and law degrees from Yale University, according to Reed’s office.
“She has the expertise and importantly the temperament to be an extraordinarily effective commissioner of the Securities and Exchange Commission,” Reed said at today’s hearing.
Piwowar, 45, would become one of the few economists to serve as a commissioner. He earned a Ph.D in finance from Pennsylvania State University and previously worked as an economist at the SEC and at the White House under George W. Bush and President Barack Obama. He would join the commission as it seeks to improve its integration of economic analysis into rulemaking.
“Both he and Kara Stein have faced the rigors of legislating the Dodd-Frank Act, the Jobs Act, and a number of other securities-related matters during their time on the banking committee,” Senator Mike Crapo, an Idaho Republican, said. “This battle-scarred expertise will serve them both well at the SEC.”
Neither Stein nor Piwowar appear to have significant conflicts of interest that would force them to recuse themselves from SEC rulemaking or enforcement cases, according to their federal financial disclosure reports.
Stein’s financial assets include investments in mutual funds and shares of Orbital Sciences Corp. Her disclosure report states her assets are worth between $211,015 and $565,000. She earned $139,998 as a Senate staff member between April 2012 and March 2013, according to data from Legistorm.
Piwowar reported his financial assets are worth between $155,029 and $750,000. He earned $171,038 as a Senate aide between April 2012 and March 2013, according to Legistorm, which compiles congressional data.
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