he new self-regulatory organization, or SRO, for the fund industry looks to be stillborn based on interviews SEC officials gave to Reuters
yesterday. "I don't sense that we need to do it right now," the news agency quotes SEC Commissioner Roel Campos
The report added that Campos views a mutual funds SRO as "a last resort." It also noted that SEC Chairman William Donaldson
and commissioners Harvey Goldschmid
and Paul Atkins
are also skeptical about the value of an SRO. If the report is accurate, four of the seven commissioners are opposed the SRO, effectively dooming the idea.
The idea for the SRO was floated in the last weeks that Harvey Pitt
held the chairman post of the Commission and was part of a flurry of last minute activity led by Pitt.
The initiative led by Pitt was not the first time that the SEC has mulled over the idea of creating an SRO to oversee funds. The idea holds appeal inside the SEC because the fund industry has grown too large for the staff to conduct regular inspections of all funds. The problem the SEC faces with the idea, though, is that there is no case of fund abuse or other compelling proximate reason that can be used to justify the creation of an SRO.
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