Dodd-Frank Act - White Paper - U.S. Securities and Exchange Commission: Organizational Study and Reform

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U.S. Securities and Exchange Commission: Organizational Study and Reform, Boston Consulting Group, March 10, 2011

In accordance with a mandate from the Dodd-Frank Act, the U.S. Securities and Exchange Commission (SEC) was required to hire an independent consultant to examine the exchange's structure and operations, and make assessments of areas in need of reform. The SEC selected Boston Consulting Group (BCG) to conduct the study. After conducting 425 discussions with present and former exchange officials, regulators, and industry groups, the consultant presented its results on March 10, 2010. The study focused on four areas of concern:

  • Organizational structure;
  • Personnel and personnel resources;
  • Technology and technology resources; and
  • Relationships with self-regulating organizations (SROs).[1]

BCG recommends significant changes within the organization in areas such as technology and human resources, but recognizes the funding constraints with which the organization is faced. As SEC Chairman Mary Schapiro remarked in a statement released in response to the Study's recommendations, "the report of the independent consultant confirms the concerns I have been expressing that the SEC does not have the resources to perform all the activities expected of us."[2]

Perhaps the most controversial recommendation from the study is one that could delegate many oversight responsibilities to SROs such as the Financial Industry Regulatory Authority (FINRA).[3]

Link to BCG Study
Link to Statement by Chairman Schapiro

References

  1. U.S. Securities and Exchange Commission: Organizational Study and Reform, Executive Summary. U.S. Securities and Exchange Commission. Retrieved on March 15, 2011.
  2. Statement From Chairman Schapiro on Independent Consultant Report of SEC Organization and Operations. U.S. Securities and Exchange Commission. Retrieved on March 15, 2011.
  3. Study recommends SEC reorganization. Washington Post. Retrieved on March 15, 2011.

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