The Securities Industry Association Wednesday applauded the Securities and Exchange Commission’s proposed modernization of the governance of self-regulatory organizations, and its request for comment on additional structural changes to the SRO system.

“The SEC’s initiative continues the process that the SEC undertook last year in approving significant changes to the New York Stock Exchange’s governance,” said Ira Hammerman, SIA senior vice president and general counsel. “These rules were a constructive transitional step, and we look forward to reviewing how the SEC proposes to enhance them.”

Hammerman also praised the SEC’s decision to put out for comment a concept release raising the possibility of implementing specified enhancements to the current SRO system or pursue one of several possible alternative regulatory models. “It is time to determine if our current self-regulatory system offers sufficient checks and balances, or whether a different model would provide a greater level of investor protection and regulatory efficiency,“ Hammerman said.

“The current system of duplicative regulatory schemes results in higher costs for services that are passed on to investors,” he noted. “The current SRO structure also poses significant conflicts between SROs’ dual roles as market operators and as regulators of members that offer competing products and services. We are pleased that the SEC is soliciting suggestions on how the SRO structure can be changed to better serve investors.”

“There are also significant issues about the ways in which SROs use market-data fees to fund their operations, and whether market-data fees are assessed in a manner that is transparent, economically efficient, and conducive to widespread dissemination of that data,” he concluded. “We look forward to commenting to the commission on these important issues.”