After announcing her consideration to resign in September, Securities and Exchange Commission Chairman Mary Schapiro formally announced Monday that she will step down from her position on Dec. 14, 2012.
Shortly after Schapiro’s announcement, the White House revealed that SEC Commissioner Elisse Walter would fill the position. While Walter’s Commission is currently expired, a Commissioner can legally serve through to the end of the next session of Congress. This means Walter can continue to serve until December 2013.
Analysts are already making the point that Walter was potentially chosen as a temporary solution to avoid a lengthy confirmation process in the midst of more pressing issues such as fiscal cliff negotiations and nominations such as Treasury Secretary and Secretary of State.
So what does the Walter fix mean for the SEC and, more importantly, for the economic future of the nation?
According to Compass Point research, it does not appear that Schapiro’s policies and priorities will go out the window once Commissioner Walter takes over. Based on voting records, it seems that Walter was a close ally of Schapiro’s since being sworn in to her post in 2008. It is important to note that the SEC is now deadlocked with two members from each political parties.
The immediate impact of Schapiro’s departure is that the rulemaking process at the SEC will become inherently more difficult. The greatest example of this is the money market reform, which Chairman Schapiro attempted to institute but fell short by three votes needed to advance a rule. Even when there were three Democrats on the Commission, the reform proposal was postponed due to the objection of one member.
Once Schapiro leaves, Walter will be the only active Commissioner who supported the MNF proposal. It is still expected that the proposals will be revisited in March 2013; however it is required that those recommendations be approved by the SEC.
Click on the image below to see the SEC Commission once Chairman Schapiro leaves.