Securities Industry Commentator by Bill Singer Esq

So the concentration of power in our capital markets -- and the SEC's failure, in the past, to grapple with its implications -- has left us with a marketplace in which investors have only the slimmest menu of choices. And ordinary American investors who rely on those markets to pay for college or fund their retirement pay for it out of their hard-earned savings.

There are four steps we at the SEC can take to begin to change that.[26] First, although the economic analysis that accompanies our rulemakings technically includes, as the law requires, an assessment of the effects of the proposal on competition, that work doesn't sufficiently engage with the lack of competition in the markets we regulate. The absence of meaningful competition in certain markets ought to inform our policy choices. For example, although a fully competitive market might not need conflict of interest rules -- because investors can simply choose to work with unconflicted counterparties -- a lack of competition might require the SEC to be more aggressive about investor protection. The reason, of course, is that without competition investors have few alternatives -- and may find themselves forced to work with agents who have costly conflicts. In short, as regulators, we should recognize that the free market is less able to resolve issues on its own in the absence of real competition for investor dollars. . .

• Securities Industry Commentator
• Bill Singer