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Cox: SEC to keep investors first

WASHINGTON - The chairman of the Securities and Exchange Commission reassured a Wall Street crowd on Friday that the agency will lend a sympathetic ear to complaints about overly burdensome regulation in its effort to improve market competition. At the same time, Chairman Christopher Cox said the SEC will continue to put investor protection first.

Cox, a longtime California Republican congressman named by President Bush in the spring as the government's top market regulator, struck a delicate balance in his speech to the gathering of the Securities Industry Association, Wall Street's biggest lobbying group. Rules can sometimes have the opposite effect from what regulators intended, he said, while asserting that the SEC under his tenure should not and will not reopen and contest every prior regulation.

Some of those recent rules, adopted under Cox's predecessor, William Donaldson, have stirred controversy and court challenges - notably a mandate that chairmen of mutual funds be independent of the companies managing the funds and a move bringing the burgeoning hedge fund industry under stricter government supervision.

The hedge fund rule is scheduled to take effect next February - "and it will," Cox told the group at its annual meeting in Boca Raton. "It is my conviction that consistency and clarity in rulemaking and enforcement are essential. The SEC will strive for that going forward."

The selection of Cox, who also has worked as a securities and corporate lawyer, following Donaldson's resignation prompted some investor advocates and union leaders to warn that he could relax enforcement and reverse progress in protecting investors since the 2002 corporate scandals. Cox made a point of assuring that won't happen. It was one of his few public policy speeches since leaving the House to take over the SEC in August.

"We know . . . that as much as we would wish it, neither Enron, nor Parmalat nor Refco will be the scandal that ends all scandals," he said Friday. "That's why, when I took the helm of the SEC 100 days ago, I made enforcement our No. 1 priority. Prior to my confirmation, some had wondered whether the SEC's direction would change in this regard. It will not."

[Last modified November 12, 2005, 00:54:17]