Ms. Blass's statements are a good example of the SEC focusing on the basics: regulating large scale public markets, seeking to protect public investors, and establishing rules that are of broad general application. Given the size of the market, it makes sense for the SEC to take on rulemaking with respect to ETFs. In fact, it raises a question as to whether the Investment Company Act itself should be amended to provide statutory recognition of the product.

This is a good idea. It is also an illustration of how the SEC should be approaching rulemaking in an area as complicated as the trading of equity securities: don't just do something, test out a concept where it is possible to do so.

Securities firms would benefit from a common framework as to how to handle dealings with senior investors. On the one hand, firms must recognize that they face material liability in facilitating risky investments by seniors. On the other hand, many seniors are perfectly capable, control a lot of wealth, and have long investment horizons.

At a minimum, this means that firms need to be very cautious as to situations in which they may be deemed to exercise discretion or material…