Regulators Promise Eased Rules for Both Stocks and Derivatives

Paul Atkins, chairman of the U.S. Securities and Exchange Commission and Caroline Pham, acting chair of the Commodity Futures Trading Commission. (Kent Nishimura/Bloomberg)

The head federal regulators for both stocks and derivatives told a securities industry group this morning that changes are in the works.

Going public will get easier, and annual meetings will be freed from pesky shareholder proposals, promised Paul Atkins, the chair of the U.S. Securities and Exchange Commission, as he appeared at Tuesday’ annual meeting of the Securities Industry and Financial Markets Association trade group in Washington, D.C. Start-ups will be welcomed back into the public markets.

“Capital formation is what the capital markets are all about,” said Atkins. “It’s not for making money by trading securities. It’s about raising capital for business—which is what built the United States.”

Atkins said his agency was developing rules for the use of blockchain technology in the issuance and trading of securities, while awaiting Senate passage of the Clarity Act —which will divvy up cryptocurrency regulation between the SEC and the Commodity Futures Trading Commission.

The CFTC’s Acting Chair Caroline Pham followed Atkins to the dais, and proudly reeled off her successes at streamlining and updating her agency. Pham said she has also been able to issue half a dozen rules since Sept. 4, when the resignation of Democrat Kristin Johnson left Pham as the CFTC’s sole commissioner.

“I am the Commission,” Pham joked.

Before the end of the year, Pham hopes to rationalize conflicting rules that now oblige traders to put up more collateral than needed to secure margin loans. She thinks she will save Wall Street a lot of money.

“I am not understating it when I say that I might be able to fix some of these longstanding issues and provide over $25 billion of savings across the banking industry for all the major dealers,” said Pham.

Mostly, Pham and Atkins promised to be more open-minded to financial innovations—than were their Democrat predecessors.

That will lead to a financial renaissance, said Pham. “You’re going to see a level of product innovation that we probably have not seen in our markets since the ‘90s.”

Write to Bill Alpert at william.alpert@barrons.com