New finance Laws Can Hurt Regulation, Shapiro Says

proposals to get rid of new limits on public access to SEC's files

Lawmakers were warned on Thursday by Securities and Exchange Commission Chairman Mary Schapiro that proposals to get rid of new limits on public access to SEC's files would impair the agency's capability to regulate financial entities.

Several bills currently pending seeks to eliminate a provision in the financial reform law that permits the SEC to deny the general public's requests to see particular documents under the Freedom of Information Act.

During a congressional hearing held on Thursday, Schapiro tried to convince lawmakers that the commission would not abuse the provision, saying that removing it would only impede the agency's work to detect irregularities in the financial sector.

Schapiro said that she is “concerned that these bills will diminish the commission's ability to obtain in a timely fashion the information needed for comprehensive examinations.”

The issue is turning out to be a rare point of agreement between the two parties. The Senate Judiciary Committee on Thursday voted unanimously to remove the FOIA exemptions in the financial reform legislation.

Schapiro expressed concern that the pending bills could not let the SEC assure financial firms that the agency can protect certain documents from being accessed by the public and their business competitors.

She said that such concerns plus other vague provisions in the law have created scenarios where financial entities refuse to submit documents or delay submitting them to the agency.

Schapiro said she was “very anxious” to work with lawmakers for a solution and find out how to fix the provision.

Posted by James Fried on Saturday September 18 2010, 2:18 PM EST. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0