NASAA Supports Murray Amendment Giving States a Seat on the Systemic Risk Council

The North American Securities Administrators Association (NASAA) has urged members of the U.S. Senate to support an amendment to the Restoring American Financial Stability Act of 2010 (S. 3217) that would give state securities regulators a seat on the bill's proposed systemic risk council. In a letter sent yesterday to each member of the Senate, NASAA President Denise Voigt Crawford asked the lawmakers to approve an amendment introduced by Sen. Patty Murray (D-WA) that would require state regulators to be included on the Financial Stability Oversight Council proposed under Section 111. The provision in the Murray Amendment mirrors language contained in the bill passed in December by the House of Representatives, the Wall Street Reform and Investor Protection Act of 2009 (H.R. 4173).

NASAA believes that the Financial Stability Oversight Council must have representation from all three major areas of state financial regulation—securities, insurance, and banking—if the entity is to have access to all relevant information regarding the accumulation of systemic risk in the financial markets. Citing the recent $61 billion settlement reached by state securities administrators following their investigation into the collapse of the auction rate securities market, Crawford said that state regulators would bring to the Oversight Council the insights of a team of “first responders” who are often first to identify national problems at the local level and then bring enforcement actions to halt them. In NASAA's view, formalizing cooperation and communication among state and federal regulators will make oversight of intertwined financial markets more effective by creating a collaborative approach to evaluating and controlling systemic risk.

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