A critical component to restoring our nation's economic stability and the health of our capital markets will be the ability of our regulators to provide more effective and predictable oversight. Recent failures in market oversight have highlighted the extreme consequences of ineffective regulation.

Today the Chamber's Center for Capital Markets Competitiveness is announcing 23 recommendations for the Securities and Exchange Commission, which we believe will help improve the regulatory oversight process. We're focusing on recommendations that can be implemented under current SEC jurisdiction and can increase the agency's ability to effectively allocate regulatory resources in the short-term.

Six of the report's recommendations address overarching issues related to the organizational structure and management shortcomings of the agency. The report recommends realigning key operating divisions, establishing a Chief Operating Officer (COO) for the SEC, as well as forming a new Coordinating Council to ensure better coordination and more uniform regulation across the SEC's divisions.

The study concentrates on improvements that can be made to three core SEC functions: staff no-action letters, exemptive orders, and self-regulatory organization (SRO) rule. Regulated persons and entities believe that obtaining guidance or key decisions from the SEC through these processes is increasingly difficult and unpredictable. This jeopardizes investor protection and is a barrier to responsible market innovation.

Our study showed that when these core SEC procedures are successful, the success is often attributed to the ability of the SEC staff to act creatively and informally without the need to initiate a rulemaking process or require official agency action by the Commission. But critics of the SEC frequently point to the informality of certain processes, the limited role of the Commission, and the disregard for the legal requirements of the Administrative Procedure Act (APA) as weaknesses in the regulatory system. Our analysis confirmed that there is an element of truth in both positions.

Our recommendations attempt to balance many conflicting interests that are inherent in these processes--informal flexibility and formal procedures, the roles of SEC Commissioners and SEC staff, regulatory speed and exhaustive scrutiny, and, most importantly, encouraging responsible innovation and capital formation without sacrificing investor protection.

The recommendations and report are available today on our Web site.