A Dean As a Securities Watchdog

Since Manuel F. Cohen left the post in 1969, the U.S. Securities and Exchange Commission has had no fewer than five chairmen, a measure of the job's toughness during a time of reform in the securities industry. Last week President Carter designated still another boss as the nation's securities watchdog: Harold M. Williams, 49, the brilliant dean of U.C.L.A.'S Graduate School of Management and former chairman of Norton Simon Inc., the consumer-products conglomerate. After his expected confirmation by the Senate, Williams will replace Roderick M. Hills, chairman since 1975, who had told Carter that he wanted to leave by April 1.

A few Wall Streeters might have preferred Peter Solomon, a managing partner of New York's Lehman Bros., mainly because he was one of their own; Solomon was in the final running for the job. But in Williams, they find few faults. Says Donald Marron, president of Mitchell Hutchins and a longtime friend of Williams' who calls him Hal: "He is a broad-gauged person. That's good for the SEC." Donald Weeden, chairman of Weeden & Co., feels Carter made a good choice in picking someone from outside the securities field. "The job is to regulate," says Weeden, "not to be a trade association."

Williams will begin his five-year term at a time when many of the difficulties facing previous chairmen have already been resolved. Much of the private-club nature of the New York Stock Exchange has been stripped away by SEC-mandated rule changes. Negotiated commissions for stock trades went into effect nearly two years ago, abolishing the anticompetitive fixed-commission system. A consolidated ticker tape is in operation, allowing investors to compare prices for individual stocks on several exchanges, including the N.Y.S.E.

But Williams will still have to contend with some thorny issues. The most important is creation of a central market --which Congress mandated in 1975 without defining how the goal was to be achieved--that will somehow tie together all the nation's stock exchanges. One way to start would seem to be mergers of stock exchanges, and several are in the talking stage, but the SEC has not yet received a proposal. If it does, Williams will find the commission itself divided: one faction believes mergers would increase efficiency, another considers them anticompetitive.

Trading in options, currently the hottest speculative arena, will be another of Williams' concerns. Options are the right to buy or sell stocks at a specified price within a set period of time. Currently they are traded mainly on the Chicago Board Options Exchange, but they have also spread to the American Exchange and are headed for the N.Y.S.E. The SEC has approved a pilot program in Philadelphia, where options and the stocks that they are based on are traded on the same exchange. The SEC under Williams' direction will have to decide how much more expansion of options trading should be permitted, and which safeguards should be imposed to prevent market manipulation and the fleecing of unsophisticated investors.

A young achiever who earned both undergraduate and law degrees before he turned 22, Williams took over U.C.L.A.'s business school in 1970 and turned it into the top-rated school of its kind among public universities in the nation. He is no stranger to the ways of the SEC. As Norton Simon's chairman, he labored under the agency's watchful eye and later served on an SEC committee working toward getting companies to disclose more information to the public. He wanted the SEC job, but, friends say, he did not personally lobby for it. He figured that if Carter searched thoroughly enough, he would be "discovered." As a regulator, Williams is expected to show a respect for natural forces in the marketplace, tempered with practical lessons learned as Norton Simon's boss--and sweetened with a touch of academic idealism.

Carter made two other regulatory appointments last week. For head of the Federal Aviation Administration, he picked Langhorne M. Bond, 40, secretary of the Illinois Department of Transportation. Bond's job is to keep aircraft flying safely; he favors less federal regulation of industry. Carter's choice for president of the Export-Import Bank is John L. Moore Jr., 47, a Harvard-trained Georgia lawyer, Rhodes scholar and specialist in corporate and real estate finance. He thus seems only marginally prepared for the Eximbank job, which is likely to involve him in loud arguments about how much the bank should lend to nations that violate human rights and how far it should go in financing the building overseas of nuclear power plants, which opponents consider unsafe.

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