Dodd-Frank Act Requires the U.S. SEC to Draft More Than 100 Rules
More than 100 rules have been drafted by the U.S. Securities and Exchange Commission, in compliance with the requirement of the Dodd-Frank Act. This was made possible despite the vacancy of a top level position.
The Commission has been functioning without a chief economist, since March of this year when James Overdahl stepped down.
In an interview, Overdahl admitted that the restructuring implemented by SEC Chairman Mary Schapiro, played a big factor in his decision to leave.
The primary role of the chief economist at the U.S. SEC is to review potential regulations and to ascertain if the benefits are greater than the cost. This role of the chief economist is very critical, particularly now that the SEC is about to implement the financial-industry overhaul that was enacted in July. Any misstep in determining the economic impact of the rules could open the agency to a barrage of lawsuits.
A former SEC chief economist and now professor of finance at the University of Southern California, Lawrence Harris, said, “The commission is very strong in securities law, strong in accounting, but much weaker in the area of financial analysis.”
Harris also added, “Writing regulations that will serve the public well, meet the congressional intent and survive legal challenges will require that the commission consult expertise in every discipline, including economics.”