Donaldson said that during the comment period for the proposal, the Commission received many suggestions, among them implementing a system of audited controls that would better prevent and detect late trading. Other suggestions have included the use of more sophisticated technology that could eliminate late trading, or at least make it more easily detectable.
In addition to the 4 p.m. proposal, Donaldson said the SEC is hard at work and has created multi-divisional task forces to brainstorm and develop strategies to address concerns in a proactive way.
"These six task forces, which are under way now, will tackle a number of important issues: soft-dollar arrangements, bond market transparency, college savings plans, enhanced mutual fund surveillance, enhanced SRO surveillance and, over the longer haul, our entire disclosure regime," Donaldson said.
As for soft dollars, Donaldson said the Commission should at the very least narrow the definition of "research" that is applicable for purchase through the use of soft dollars so that only "real" research is bought with this money.
Noting that some have advocated making a distinction between third-party and proprietary research, Donaldson said he personally thinks the Commission should not draw such a conclusion, but that the task force will consider the suggestion.
