SEC Facing Struggle to Finish Market Stability Rules, White Says

A Conversation With SEC Chair Mary Jo White
  • Chair says some steps may not be completed when her term ends
  • `It's not something you want to rush,' she says in interview

U.S. Securities and Exchange Commission Chair Mary Jo White said her agency is unlikely to complete rules intended to bolster market stability before she steps down, as the clock ticks down on President Barack Obama’s administration.

A slew of high-profile trading halts and exchange disruptions has made it a priority of White’s to enhance U.S. market structure, she said Tuesday in a Bloomberg Television interview with Erik Schatzker. She conceded that only some of the regulations she set out to approve will likely get done during her tenure.

“The worst thing you can do is look at something that superficially seems to make sense, but you really don’t have the data to justify going forward on,” White, who became SEC chair in 2013, said on “Bloomberg GO.” “You may do more harm than good, so it’s not something you want to rush, but it’s certainly something we have made major traction on.”

The SEC has drawn criticism from lawmakers and some market participants for not finishing rules and projects that have been in the pipeline for years. Some of the regulations that have yet to be proposed, including one targeting high-frequency trading strategies that can destabilize markets, were outlined by White in 2014.

‘Hard Push’

The staff is still “formulating a recommendation” to address speed trading that can be disruptive during periods when markets are most vulnerable, she said Tuesday.

“That’s something we are pushing very hard on this year,” White said.

The SEC has also been working to create a central database to monitor quotes, orders and trades for U.S. stocks and options for six years. Called the consolidated audit trail, the system was proposed in response to the May 2010 flash crash, which triggered an almost 1,000 point loss for the Dow Jones Industrial Average within minutes before prices recovered.

“It’s a very high priority to get that plan approved this year,” White said. “I expect the commission will actually get notice and comment on that quite soon.”

White added that the SEC’s broad review of equity markets will continue after she leaves the Wall Street regulator.

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