NY Times: What's Coming Next at the SEC

by: Belvedere

Saturday's New York Times featured a front-page piece by reporter Stephen Labaton on the forthcoming timetable to be set by the SEC for American companies to use IFRS - and mutual recognition of the enforcement agencies regulating foreign brokers, enabling foreign brokers to sell directly to Americans. 

The S.E.C. also plans to announce details of a pilot program that would enable foreign brokers to deal directly with American investors, while continuing to be largely regulated by the foreign country. The first country in the program will be Australia, although officials hope to eventually include other countries.

On top of that:

In a third move, the Public Company Accounting Oversight Board, which works under the supervision of the S.E.C., is preparing a rule that would allow it to defer to foreign regulators for inspections of some of the 800 foreign auditors of overseas companies that sell stock in the United States.

It's a good article for people just wondering how many things can be going on at one time. It also raises the question of whether all this activity is for the good of the investor - or just politics as usual as an administration comes to a close. And maybe the best quote in Labaton's far-ranging article is this one: 


James D. Cox, a securities law expert at Duke Law School who returned this week from teaching corporate law in Europe, said the shift to international rules amounted to “outsourcing safety standards."

"We would not for a moment tolerate having American auto safety standards set by China or India,” he said. “Why should we do it for financial safety standards? There has to be some accountability."

The SEC has been pitching internationalization of markets like there's no one trading here any more. It's a good scare tactic, and it's effective for getting people to think their way. Accountability is a non-starter: it's the Achilles heel of these efforts, and there will probably be a good deal less of it.