Thursday, May 19, 2011

President Obama to Nominate SEC Commissioner Who Wants to Prevent Regulatory Arbitrage

President Obama intends to nominate current SEC Commissioner Luis Aguilar for a second term on the Commission and nominate former SEC staffer Daniel M. Gallagher to be an SEC Commissioner. When he was a senior SEC official, Mr. Gallagher focused on the regulation of credit rating agencies and, more broadly, on the importance of consistent high-level cross-border financial regulation to prevent regulatory arbitrage.

Mr. Gallagher is a partner in the Securities Department of Wilmer Cutler Pickering Hale and Dorr, LLP, where he focuses on regulatory issues and market-related enforcement matters. Prior to joining the firm, Mr. Gallagher was a Deputy Director of the SEC Division of Trading and Markets, which oversees broker-dealers, stock and option exchanges, credit rating agencies, clearing agencies, and transfer agents. He also served as Co-Acting Director of the Division from April 2009 to January 2010. Mr. Gallagher earned a B.A. from Georgetown University and a J.D. from the Catholic University of America. He is slated to replace Commissioner Kathleen Casey, who was appointed by President George W. Bush to the SEC and sworn in on July 17, 2006. Her term expires in 2011. While serving as an SEC Commissioner, Ms. Casey chaired the IOSCO Technical Committee.

Commissioner-designate Gallagher has a strong interest in the role of credit rating agencies and the consistency of cross-border financial regulations. In hearings before the House Financial Services Committee, then Co-Acting Director Gallagher testified that the Commission is committed to administering a comprehensive and effective oversight program for credit rating agencies. In remarks at a Catholic Law School securities alumni luncheon, he emphasized that the oversight of credit rating agencies will continue to be an important area of responsibility for the Division of Trading and Markets.

While Co-Acting Director of Trading and Markets, he served as the Chair of Standing Committee 6 of the IOSCO Technical Committee, charged with the duty to consider greater and consistent cross-border regulation of credit rating agencies and to facilitate dialogue between securities regulators and the credit rating industry. His experience with initiatives to align financial regulations globally could be invaluable as Congress expresses a deepening concern with regulatory arbitrage as the Dodd-Frank rulemaking moves forward.

As a SEC senior official, the Commissioner-designate explored how to strengthen transatlantic and global dialogue between financial services centers to improve governance. He recognizes that today’s financial markets are truly globalized and interconnected. In remarks at a global financial conference in Dublin, he noted that dialogue among the word's most important financial regulators is the key to more effective regulation in all jurisdictions. In particular, an ongoing dialogue among regulators located in foreign jurisdictions helps them learn from each other's successes and failures. Importantly, in light of Congressional concerns for harmonized cross-border regulations, Mr. Gallagher believes that cross-border dialogue helps converge regulatory standards to the highest levels and thus protects investors and maintains the integrity of the financial markets.

Appointed to his first term by President George W. Bush, Commissioner Aguilar was sworn in on July 31, 2008. Commissioner Aguilar represents the Commission as its liaison to both the North American Securities Administrators Association and to the Council of Securities Regulators of the Americas. He has served as the primary sponsor of the SEC's Investor Advisory Committee.

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