The current reforms being bandied about on Wall Street come close, but no cigar,

Securities and Exchange Commission

chief William Donaldson said Monday.

Donaldson wants to see further-reaching reforms on the

New York Stock Exchange

and increased regulation of the mutual fund industry, he said at a conference sponsored by Financial Executives International, a professional association for financial executives, according to an

Associated Press

report.

While praising the work of NYSE interim chairman John Reed, Donaldson said, "

His efforts represent an important first step, but only a first step." Reed's proposals include trimming the NYSE's current board of directors, limiting its function and creating a new group to set executive pay.

The SEC is currently embroiled in an ever-widening probe into the $7 trillion mutual fund industry, and has already settled some cases of improper and illegal trading, as in the case of hedge fund Canary Capital Management and

Putnam

funds.

"The wrongdoing must stop," Donaldson said, according to the report. "We must institute reform to provide better protection in the future."