Over-the-counter derivatives that are securities-based should be regulated under federal securities laws by the Securities and Exchange Commission, SEC chairman Mary Schapiro told a Senate panel yesterday.

At a hearing on modernizing the OTC derivatives market held by the Senate Banking subcommittee on securities, insurance, and investment, Schapiro said her agency's core mandates of promoting investor protection, fair and orderly markets, and capital formation make it the right regulator to oversee securities-based OTC derivatives.

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