Republicans reject SEC user-fee amendment to appropriations bill

Add-on was attempt by Rep. Maxine Waters to come up with funding to increase adviser exams

Jul 15, 2014 @ 12:45 pm

By Mark Schoeff Jr.

House Republicans shot down an attempt by Rep. Maxine Waters, D-Calif., to amend a spending bill with legislation designed to increase the number of investment-adviser exams the Securities and Exchange Commission performs.

In debate on Monday night, the GOP ruled out of order her measure that would authorize the SEC to charge advisers user fees to fund exams. Ms. Waters attempted to attach the amendment to an appropriations bill that funds the SEC and several other government agencies.

Rep. Ander Crenshaw, R-Fla., chairman of the House Appropriations subcommittee that controls the SEC budget, said Ms. Waters' amendment would change existing law, something that's prohibited within an appropriations bill.

Ms. Waters, the ranking member of the House Financial Services Committee, also has called on the panel to hold a hearing on stand-alone user-fee legislation that she has introduced.

The House is slated to begin voting Tuesday afternoon on amendments to the underlying appropriations bill, which would give the SEC a $50 million increase to its budget for fiscal 2015, putting it at about $1.4 billion. That amount is $300 million less than what the SEC requested.

The agency has said that one of its priorities for the funding increase is to hire about 240 more investment-adviser examiners. The SEC maintains that it has the resources only to examine annually about 9% of the approximately 11,000 registered investment advisers.

The SEC allocation is one aspect of the appropriations bill that has drawn a veto threat from the White House.

“At this funding level, the SEC would be unable to add critical positions in market oversight, compliance and enforcement to carry out its financial oversight responsibilities under the [Dodd-Frank financial reform law] and other authorities,” said the statement of administration policy issued by the Office of Management and Budget on Monday.

Another amendment offered by Ms. Waters that would provide the full administration funding request to the SEC was defeated on Tuesday afternoon, 235-184.

In a statement on the House floor on Monday night, Ms. Waters said the House appropriations bill would lead to the furlough of “examiners that are needed to reduce the backlog of investment advisers that have never been visited by the SEC.”

She touted user fees as the best way to strengthen adviser regulation.

“This amendment provides the simplest, most efficient solution to the problem of inadequate adviser oversight,” she said. “It is absolutely essential that we improve the oversight of investment advisers, the people that manage the assets of millions of individual and institutional investors across the country.”

Ms. Waters' user-fee bill has no Republican co-sponsors. The House GOP-majority has consistently denied the SEC a big budget boost, arguing that the agency needs to improve its performance before receiving more funding authority.

One of the authors of the financial reform bill warned that its opponents are trying to “starve” the SEC of funding to hinder its implementation.

“There is this whole notion of the anti-regulatory environment,” former Sen. Christopher Dodd, D-Conn., told reporters Tuesday on the sidelines of a conference at the Bipartisan Policy Center in Washington. “If you don't like regulation, then starve the agency responsible not only for writing them but implementing them. That's how you achieve the same result [as] repealing the law.”

0
Comments

What do you think?

View comments

Recommended for you

Upcoming Event

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

Events

Why does social media matter for financial advisers?

Social media is a reflection of who you are. But who are you as a financial adviser? Debra Bednar-Clark of DB+co offers some solutions to enhance your practice.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

RIAs struggle to keep clients grounded amid stock market euphoria

With equities at record levels, financial advisers are confronted with realities of greed and fear.

Regulators showing renewed interest in cracking down on investment fees

SEC, Finra targeting high-fee share classes, 12b-1 fees and failure to give sales load discounts and waivers to investors.

Tax update: Brady says sales tax deduction in final bill

Taxpayers will be able to deduct state income taxes or state sales taxes in addition to property levies — up to a $10,000 cap.

Complexity of new indexed annuities causing concern

Insurers are using 'hybrid' indices as a way to differentiate themselves, but critics contend the products are less transparent, more confusing and don't add financial benefit.

Critics say regulation hasn't curbed overly rosy projections for indexed universal life insurance

They say rule didn't go far enough and more stringent measures may be necessary.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print