As the last Democrat on the commission, her departure leaves three Republicans -- Chairman Christopher Cox and Commissioners Paul Atkins and Kathleen Casey.

In August, Democrat commissioner Roel Campos announced his departure. At that time, the Wall Street Journal, citing an anonymous source, said Nazareth would leave by year end.

Nazareth has not set a date for her departure, but has notified President Bush that she does not wish to be re-nominated. Her term ended on June 5, 2007, but commissioners may remain in their positions for up to 18 months beyond a term's end, unless a successor is appointed sooner.

The announcement allows President Bush to nominate two Democrat replacements. The SEC has five members, and no more than three can be from the same party.

In her nine years at the SEC, as a commissioner and previously as director of the SEC’s Division of Market Regulation, Nazareth has served under four SEC chairmen.

The SEC adopted a number of significant reforms during her tenure. In particular, Nazareth played a key role in the commission's efforts to modernize its national market system rules, which recognized the transformation of securities markets from primarily floor-based environments to more fully electronic venues and created a level playing field with greater competition among markets of varying models and better pricing for investors.

Prior to joining the SEC, Nazareth held several positions in the financial services industry, including at Smith Barney, Lehman Brothers and Mabon Nugent. She began her career as an attorney at Davis Polk & Wardwell.