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January 3, 2006

SIA Calls for Single Regulator

By Gregory Bresiger

A hybrid SRO model would save money and reduce regulatory duplication, a securities industry leader recently told Congress.

"Combining the SRO broker-dealer regulatory programs into one centrally managed entity-the hybrid SRO-would eliminate regulatory duplication," said Marc Lackritz, president of the Securities Industry Association.

Lackritz, testifying before the House Subcommittee on Capital Markets, said today's self-regulatory system has numerous drawbacks. Among the system's weaknesses are potential conflicts of interest, the profit motive detracting from the regulatory function and conflicting SRO rules.

Lackritz urged the SEC to write transparency requirements for the single-member SRO. And who would pay for this super regulator? Lackritz said funding could come from fees assessed on broker-dealers as well as from the issuers and other constituents of the trading markets.