Earlier today, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing, which included nominees Kara Stein and Michael Piwowar to become Commissioners of the Securities and Exchange Commission (SEC). Senator Jack Reed (D-RI) described Ms. Stein as an “extraordinarily gifted individual” who chose public service over a lucrative career as a lawyer. “She understands how integral a well-functioning financial system is to the health of our economy,” Senator Reed said. “[And] she is inherently fair and values transparency and accountability.”
Regarding Dr. Piwowar, Ranking Member Mike Crapo (R-ID) stated, “With a Ph.D. in Finance, he appreciates the value that economic analysis plays in SEC rulemaking, examination, and enforcement processes.” Ranking Member Crapo argued that the “battle-scar expertise” attained from facing the legislative rigors of the Dodd-Frank Act and JOBS Act will serve both nominees very well at the SEC.
Ms. Stein said in her testimony, “A lack of fairness and transparency in markets can lead to higher transaction costs and less capital.” She hopes to meet the challenge of protecting investors while ensuring that businesses have the access to the financial services they need. Dr. Piwowar testified that the U.S. capital market “must remain the preferred destination for investors throughout the world,” and he believes that economic analysis will be very valuable in advancing the missions of the SEC.
When the nominees were asked by Chairman Tim Johnson (D-SD) how they would balance the various complex issues on the SEC agenda, Ms. Stein said the SEC needs to pursue all of its objectives at the same time, echoing previous statements made by SEC Chairman Mary Jo White. Dr. Piwowar agreed that all of the issues need to be handled at the same time and also wants to make sure priorities are placed on rulemaking mandated under the JOBS Act and Dodd-Frank Act. He went on to further suggest than the SEC could move forward in the short run on a pilot study on tick size for small cap companies.
The Committee is expected to vote on the nominations of Ms. Stein and Dr. Piwowar in the coming weeks.