The beleaguered SEC has come under fire since the Wall Street meltdown, which raised questions about the capability of its current chairman, Christopher Cox.
Schapiro "is known as a regulator who's both smart and tough -- so much so that she's been criticized by the same industry insiders who we need to get tough on," Obama said when introducing her in Chicago.
A financial regulator for 20 years, Schapiro heads Wall Street's Financial Industry Regulatory Authority, a non-government organization since 1996.
Obama also introduced other members of his regulatory team, announcing Gary Gensler as his choice to lead the Commodity Futures Trading Commission and Dan Tarullo as his designate to be a Federal Reserve Board governor.
"Americans are looking to policymakers and regulators to restore stability and trust to our financial markets," Schapiro said. "As someone who has spent my entire career focused on investor protection, I'm looking forward to leading ... the Securities and Exchange Commission, whose mission is so critical to the future economic health of our country."