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NYSE's Chief Regulatory Officer Backs Self-Regulation


Regaining Public Trust

NYSE’s new chief regulatory officer is a proponent of self-regulation.

The New York Stock Exchange’s Richard Ketchum made a rare public appearance following his appointment to the newly created position of chief regulatory officer, when he spoke at the Albert A. DeStefano Lecture on Corporate, Securities and Financial Law at Fordham Law School in April.

Ketchum, a staunch advocate of self-regulation of the securities industry, participated in a panel in the 12th Floor Lounge in the Leon Lowenstein Building with representatives from the Securities and Exchange Commission (SEC), the National Association of Securities Dealers (NASD) and several private securities firms at a Center for Corporate, Securities and Financial Law event.

Ketchum, who is a former director for market regulation at the SEC, accepted his NYSE position in January following the resignation of its chief executive officer and chairman, Richard Grasso, amid allegations of misconduct. Despite calls for greater supervision of the NYSE and the more than 600,000 brokers and dealers in the United States, he has remained committed to self-regulation.

“Our organization has changed for the better…and we feel comfortable about the way our divisions will interact,” said Ketchum. “Self-regulation continues to hold merit.”

Ketchum’s position was created in a NYSE reorganization that insulated the regulatory division from its market operations. In addition to monitoring its own operation, the NYSE is the SEC-designated examining authority for the country’s major securities firms, including more than 250 member firms that account for more than 85 percent of customer accounts handled by broker-dealers.

Other panelists weren’t so sure that self-regulation alone will win back the public trust in the wake of recent accounting scandals that have cost investors billions.

“A lot of money was lost, a lot of trust was lost…and it will take a lot of time to get it all back,” said Brandon Becker, a broker-dealer attorney and former securities lawyer at the SEC.

— Michael Larkin

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