Even as the New York Stock Exchange and the NASD commence working on creating a single rulebook to regulate brokerages, the Securities Industry Association is speaking out against the effort. “The goal of complete harmonization will always elude achievement, since it will continually require senior-level effort to reconcile new discrepancies as they arise... No matter how capable the regulators or how valiant their efforts to reconcile their rules, just synthesizing their rules will be inferior to what can be produced by a single regulator,” the industry’s main lobby group wrote in a recent comment letter to the Securities and Exchange Commission. NYSE and NASD recently proposed a compromise in which the two regulators would cobble together a single set of rules and a better coordination plan by the year end (WSL, 2/10).
The SIA’s response has puzzled some traders. “I don’t quite buy the SIA’s reasoning. What will they say when there is only one regulator, but too much regulation?” one trading executive asked. The SEC will decide later this year whether to mandate a single SRO to regulate brokerages. The NYSE, NASD and SIA declined further comment.