NASD Chairman Mary Shapiro says she believes investment products will be more effectively regulated once the regulatory units of the NASD and the New York Stock Exchange are merged.“It’s my hope that consolidation will encourage more cooperation among regulators of all financial products,” Shapiro said in her keynote speech at the Investment Company Institute’s General Membership Meeting. “This cooperation will be critical to fixing what I consider the soft underbelly of regulation today: jurisdictional boundaries that focus on product rather than the investor.”
This is particularly critical today, given new, and more complex, products being brought to market. Going forward, Shapiro said, it will be important for the NASD to work with the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Municipal Securities Rulemaking Board, the 50 state insurance departments and numerous banking authorities.
Shapiro said the NASD is paying particularly close attention to products with high fees and outsize and/or complicated risk, as well as brokerages and investment firms that target “vulnerable populations.”
Shapiro said she expects the SEC to approve the merger this summer.