SEC Commissioner Luis Aguilar defended the expansion of financial regulation and need for a stronger Securities and Exchange Commission during a speech Monday at the Council of Institutional Investors meeting in Washington.
Noting the $2 trillion issued without regulatory oversight in the asset-backed securities market, which collapsed in the financial market meltdown, Mr. Aguilar said, "One might argue that we had capital destruction, rather than capital formation."
For the more than 580 attendees at the spring meeting, the big question was how much change to expect as last year's sweeping Dodd-Frank Wall Street Reform and Consumer Protection Act gets implemented, and when to expect it.
The regulatory overhaul law has major implications for council's membership, which represents public, union and corporate pension funds with more than $3 trillion in combined assets.
Joseph Dear, CII chairman and chief investment officer of the $225.3 billion California Public Employees' Retirement System, cautioned attendees that while regulatory uncertainty tops their list of concerns, “one thing remains certain, the council must ensure that the investor's voice is not lost.” He said CII will do that through an ambitious agenda that includes regulatory conference calls, clear analyses of issues and special teleconferences on “say on pay” throughout the year.