Securities and Exchange Commission Chairman Harold M. Williams said yesterday he believes trading in "put" options should be expanded once the SEC lifts its moratorium on new options contracts.
But Williams, in a rare press conference, declined to predict when the commission will again consider proposals to expand options trading.
An option gives an investor the right to buy or sell 100 shares of a particular stock for a specified price at a certain time.
"Call" options give investors the right to buy stock, while "puts" are the opposite, the right to sell.
Trading in "calls" had been expanding so rapidly that the SEC earlier this year put a lid on the market and said it would not allow new stocks to be considered for options trading for at least six months, while the agency studied new regulations for the business.
Williams said there is still "no target date" for ending the moratorium but also said the SEC's study of revisions in options regulations "is not stalemated."
On another issue, Williams said there may be a need for new federal legislation to protect investors because of recent court decisions that have limited the right of stockholders to sue companies.
He said Congress should establish the clear right of stockholders to sue, rather than allow the courts to throw out cases on the grounds that Congress did not specifically authorize the lawsuits.
Williams said he opposes efforts in Congress to water down the Foreign Corrupt Practices Act, which prohibits American companies from paying bribes, even in countries where bribery is not illegal. Businesses have complained they are losing overseas work to companies from countries that do not prohibit under-the-table payments.
"The issue becomes a question of whether we as a country want to trade off economics for morality," said Williams. "I don't believe that you can contain acts of bribery to foreign soil."
The SEC chairman said he also is opposed to issuing rules telling companies what payments they can make without running afoul of the law. Spelling out such rules would amount to "a road map around the law," Williams warned, adding, "If you teach someone to steal from someone else, sooner or later he'll steal from you."