Commissioner Annette L. Nazareth. U.S. Securities and Exchange Commission
Good morning. I'd first like to express what a pleasure it is to be here today at SIFMA's Compliance and Legal Conference — your first annual conference since the merger of the SIA and TBMA, and my first since becoming a Commissioner. This is truly like coming home (albeit to a rather large home with almost 2000 visiting cousins). I have grown up professionally alongside many of you, and I am honored that you have asked me to join you. I will focus today on a topic that has been highlighted recently in the discussions concerning U.S. competitiveness — that is, the notion that the SEC should move toward a more prudential approach to regulation. I will describe in detail what I mean by "prudential" regulation, where prudential regulation is already being applied by the Commission, and why I believe serious consideration should be given to finding opportunities to adopt such a model more broadly. But before I begin, I must remind you that my remarks represent my own views and not necessarily those of the Commission.1
We often hear the assertion that the SEC and other functional regulators should adopt a more principles-based regulatory approach as opposed to our current rules-based approach. I believe this is a false dichotomy. Good rules are derived from over-arching principles, but the specificity of the rules can provide useful guidance to the marketplace.
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