U.S. Treasury Secretary, Henry Paulson Jr., announced the next steps of his capital markets competitiveness action plan today.

The plan follows Treasury’s first set of capital markets initiatives announced in May to strengthen financial reporting and seek a more sustainable and transparent auditing profession. “To maintain our capital markets’ leadership, we need a modern regulatory structure complemented by market leaders embracing best practices,” Paulson said. “The steps we are announcing today will help to strengthen our global competitiveness.”

The second stage of the capital markets competitiveness plan seeks a rationalized regulatory structure with improved oversight, increased efficiency, reduced overlap and the ability to adapt to market participants’ constantly-changing strategies and tools. The plan will suggest improvements for all financial market participants, including the Treasury Department itself.

Experts at Treasury’s March Conference on U.S. Capital Markets Competitiveness noted that the right regulatory balance would combine high standards of market integrity, stability and investor protection with a strong foundation for innovation, growth, and competitiveness, it said.

The next steps of the plan will include: pursuing a modernized regulatory structure, encourage development of industry best practices for asset managers and investors in hedge funds, modernize Treasury’s cash management and debt management, complete Basel II rulemaking, empower investors through financial education, encourage international investment opportunities with recognition of comparable regulatory regimes.

The Securities Industry and Financial Markets Association praised the second stage of Treasury Secretary Paulson’s capital markets competitiveness action plan.

“As other global financial centers compete on the world stage, we must continue to reform the U.S. financial services regulatory regime so that it helps facilitate global capital flows while protecting investors and preserving financial stability. Financial centers with premier talent, innovation and financial expertise should be able to provide their services to a growing international economy, and not be hamstrung by outmoded or conflicting global regulations,” said Marc Lackritz, president and CEO of SIFMA, in a news release. “Both the Treasury under Secretary Paulson and the President’s Working Group have been excellent partners in these critical endeavors and we anticipate further progress under their leadership.”

Many of the goals listed in stage two of the Treasury plan are also primary goals of the industry, SIFMA added. Among the steps unveiled by Paulson, the industry took special note of efforts to “encourage international investment opportunities with recognition of comparable regulatory regimes.”