The president of the North American Securities Administrators Association Inc. today challenged recent reports suggesting that U.S. capital markets are losing their competitiveness due to increased regulation in the wake of Enron and other recent corporate scandals and reaffirmed the role of state securities regulators in protecting investors.

“Investor confidence is the cornerstone of the success of our capital markets. A key component to maintaining that investor confidence is a regulatory framework that provides strong investor protection,” NASAA president and Alabama Securities Commission director Joseph Borg said while opening NASAA’s public symposium.

Borg said NASAA sponsored the symposium to respond to recent suggestions that U.S. capital markets are losing their competitive edge because of burdensome regulations and regulators who are aggressively protecting investors.

“Market globalization has for so long been the mantra of Wall Street for loosening regulation. That globalization is here, with stronger, deeper foreign markets, technology equivalent to ours and a populace willing to invest in their own domestic markets. Predictably, Wall Street is attempting to blame ‘burdensome regulation’ for increased competition,” Borg said in response to recent reports, such as those by the Committee on Capital Markets Regulation, McKinsey & Company, and the Commission on the Regulation of U.S. Capital Markets in the 21st Century. The reports call for, among other recommendations, weakening the current regulatory framework by eliminating or reducing state regulatory authority.

“These short-sighted reports seek to use an appeal to fear that the sky is falling in an attempt to obstruct state, federal, and SRO regulators who are aggressively protecting investors, the bedrock of our market confidence,” Borg said. “We will continue to vigorously defend our authority to regulate at the state level and bring enforcement actions seeking appropriate remedies against those firms and individuals that violate securities laws and thereby harm investors.”

Borg also stressed that NASAA strongly concurs with recent remarks by SEC chairman Christopher Cox that there is no need to change the Sarbanes Oxley Act. He added that NASAA recognizes and agrees that “proper and fair implementation of any law is important to assure that it does not create excessive burdens, while at the same time making sense for investors and the markets.”

“NASAA supports a strong and effective regulatory structure for capital markets and to do so requires the preservation of the authority of state securities regulators, the local cops on the securities beat,” Borg said. “It also requires a strong Securities and Exchange Commission to properly implement laws, and it requires a strong self-regulatory organization for efficient compliance. It takes all three of us working in equal partnership to maintain investor confidence in the world’s deepest and most transparent markets.”