Robust Regulation and Market Quality: The Importance of Due Process in the Course of Self Regulatory Rulemaking

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12 January 2009

January 12, 2009

Via Electronic Mail (rule-comments@sec.gov)

Ms. Florence E. Harmon
Acting Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
RE: Amendments to Regulation SHO (Interim Final Temporary Rule) SEC Release No 34-58773, File No. S7-30-08

SUBJECT: Robust Regulation and Market Quality: The Importance of Due Process in the Course of Self Regulatory Rulemaking

Dear Ms. Harmon:

Securities and Exchange Commission (SEC) Chairman Christopher Cox’s comments in a recent Washington Post interview provide us with an opportunity to reflect on some of the events of 2008.

The Chairman stated: “‘What we have done in this current turmoil is stay calm, which has been our greatest contribution — not being impulsive, not changing the rules willy-nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants,’ Cox said. This caution, he added, ‘has really been a signal achievement for the SEC.’” The STA agrees that such an approach to rulemaking, along with strict enforcement of existing regulations, would have been the most prudent course of action during the very turbulent market conditions in 2008.

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