Chair of SEC, Donaldson, to Step Down

    The online service of the Wall Street Journal, MarketWatch, is reporting that the Chairman of the SEC, William Donaldson, has submitted his resignation.  He has been chairman since February of 2003.  Calls by MarketWatch to the SEC to confirm the story have not been returned.

    His tenure as Chair was not successful.  A Repubican appointee, he consistantly pushed for more SEC regulatory power and oversight.  The capstone of his tenure came when he sided with the two Democratic commissioners and against the two Republican commissioners to adopt Regulation NMS (for National Market System) that micro-manages the structure of the United States securities trading markets. He also has pushed mutual fund structural board regulation that has no empirical tie to performance.

    Needed regulatory decisions, on the other hand, came slowly.  It took several years, for example, to act on the Nasdaq's request to register as an exchange.  The new rules on public stock offerings in the era of the internet are five years late and tepid (the changes are margin given the opportunities of the new medium).   

    In sum, he championed micro-regulation where it was not needed and delayed regulatory changes that have been long overdue.  The country will do better with a new Chair.