Buzz Archive:
Speech by SEC Staff: The Future of Securities Regulation

by Brian G. Cartwright, General Counsel, U.S. Securities and Exchange Commission, 11/6/2007

Back in 1950, when retail investors represented 90+ % of the direct investment in our stock markets, investing was a much simpler proposition. Apart from the opportunity to devote greater time and attention to the effort, professional money managers did not have obvious advantages over the do-it-yourselfer. That's no longer the case, and individual investors intuit the difference. Our understanding of markets has become far more sophisticated and mathematical over the ensuing decades. The amateur plays at a disadvantage. So retail investors have simply acted rationally in choosing to turn their portfolios over to professionals, typically by employing intermediary vehicles such as mutual funds. This is only sensible, and certainly not a trend one should wish to reverse.

The speech by Brian Cartwright, SEC General Counsel, is worthy of special attention for several reasons...the least of which is that it offers a glimpse of the SEC's view of regulation--we recommend anyone interested in private equity, venture or hedge fund regulation read it.