Verbatim: Securities Industry Consensus Getting Harder to Reach

Over the past 10 years the Securities Industry Association has grown to include not just securities firms but banks, insurers, and mutual fund companies. At its recent annual conference in Boca Raton, Fla., chairman- elect Irving Weiser, who is chairman and chief executive of Interra Financial, talked about the group's changing membership and what that means for its agenda. The following is excerpted from those remarks.

When SIA was formed 25 years ago, our membership was almost exclusively run by industry executives who reported directly to their shareholders. There were no discounters or electronic deliverers. Even 10 years ago, banks and insurance companies combined owned less than 10% of our membership, and discounters had no representation among the top 20 firms.

Today, of the top 20 firms, which comprise 87% of capital of all SIA firms, 60% are unaffiliated securities firms, including discounters; 25% are bank-owned; and 15% are insurance company-owned. These changes in our composition require that we revisit our agenda for SIA.

For 25 years our legislative agenda has centered around Glass-Steagall. We will continue our efforts to level the playing field. But a consensus is getting harder to build. We will forge the battle by looking for common ground among our constituents and allies.

The SIA needs to revisit its other legislative and regulatory agendas. We are, after all, an advocacy organization, and we must build consensus on issues.

The challenge lies in the ownership changes of the past year and in the makeup of our new constituency. As an example, take the SIA board.

Of our 33 board members, six now work for companies owned by banks, four work for companies owned by insurance companies, and four are owned by fund companies.

Many more companies are doing a substantial foreign business. They have a stronger interest in the impact of a common European currency, international regulation, and the World Trade Organization talks.

The executive committee will revisit each of our major advocacy positions and ensure that we are using your resources and representing your interests most effectively.

The nominating committee will develop criteria for board representation of our diverse constituency. We will make every effort to ensure that we properly reflect our constituents.

The SIA currently has 38 standing committees. We will continue to align our committees around common issues or arenas.

Another priority for 1998 is continuing to build the public's confidence in our industry. The foundation of our business is, after all, serving clients.

We have made a lot of progress in the past few years with public trust and confidence initiatives. We need to further capitalize on our successes.

We will continue using the infrastructure of the SIA to achieve our public trust and confidence objectives, identifying best practices, working through grass-roots efforts of our members and member firms, putting quality in the process, then inspection at the end.

Public trust is not an issue that can be tackled by a select group of people. It must be embraced by every leader in the securities industry.

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