SEC Chairman Sets SEC Goals in 2014

January 27, 2014

SEC Chairman Mary Jo White in a speech at the 41st Annual Securities Regulation Institute in Coronado, California set forth the SEC’s goals in 2014. She spoke about the SEC’s Quantitative Analytics Unit, which developed a new instrument called “NEAT,” which stands for “National Exam Analytics Tool.” With NEAT, OCIE examiners are able to access and systematically analyze massive amounts of trading data from firms in a fraction of the time it has taken in years past. In one recent exam, an OCIE exam team used NEAT to analyze in 36 hours literally 17 million transactions executed by one investment adviser.

Among its many uses, NEAT can search for evidence of potential insider trading by comparing a database of significant corporate activity like mergers against the companies in which a registrant is trading and analyze how the registrant traded at the time of those significant events. NEAT can review all the securities the registrant traded and quickly identify the trading patterns of the registrant for suspicious activity.

She next spoke about  MIDAS, the Market Information Data Analytics System. It collects one billion records of trading data every day, time-stamped to the microsecond. Previously, only sophisticated market participants had access to this type and amount of trading data and even fewer were able to process it. The SEC aggregates this data and presents it on its website along with a wide range of analyses.

2014 goals include:

  • Adopting rules to implement its new regulatory framework over derivatives;
  • Completing the regulatory reform of money market funds;
  • Adopting rules requiring originators of certain securitized products to maintain certain amount of risk in the products they issue;
  • Improve the SEC’s monitoring of Rule 506 offerings after the JOBS Act and implementing and implementing final amendments to Rule 156 and Form D;
  • General disclosure reform; and
  • Vigorous enforcement of securities laws, especially bringing fraud and market integrity cases.

Click here to access her speech.


Investment Advisers, Investment Companies