SEC Chairman to Ask for Greater Control

By Zachary A. Goldfarb
Washington Post Staff Writer
Wednesday, March 25, 2009; 8:39 PM

Securities and Exchange Commission chairman Mary Schapiro plans to tell lawmakers tomorrow that she is considering asking them to require the registration of hedge funds and to give her agency the power to regulate credit default swaps and municipal bonds.

In a scheduled appearance before the Senate Banking Committee, Schapiro will also say that the SEC plans to harmonize regulations governing investment advisers and brokers and tighten rules surrounding money market mutual funds, according to a copy of her testimony, which was obtained by the Washington Post.

She plans to say the SEC is working on reforms to ensure that investment advisers safeguard customers' assets -- addressing a problem that came to light amid the revelations over the massive Bernard Madoff fraud -- and that she will come to Congress soon for authorization to boost compensation for whistle-blowers.

She will all make a plea for maintaining the SEC as an independent agency even as the Obama administration proposes creating a new regulatory scheme to protect against huge risks.

"The SEC, as a strong independent regulator with market expertise, can perform its critical capital markets and investor protection functions without compromising the oversight of systemic risk," she says in her prepared testimony. "Even as attention focuses on reconsidering the management of systemic risk, investor protection and capital formation -- both of which are fundamental to economic growth -- cannot be compromised as a product of any reform effort."

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