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.

+ Zoom
(Bloomberg News)

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

Sponsored financial news

Upcoming Event

Jun 27

Webcast

Emerging Market Debt: 5 Forces at Work

When it comes to emerging market debt, there are a series of forces that help you drive better results for your clients. In today's continually changing market environment, it is critical to know the forces at play to help keep your investment... Learn more

Accepted for 1 CE Credit from the CFP Board. Approved by IMCA for 1 CIMA®/CIMC®/CPWA® CE credit. Approved for 1 CFA Credit.

Featured video

Events

Pershing's Hempel: Investing opportunity in regulatory evolution

Amid the regulatory chaos, there are investment options that will become more attractive for investors. Joel Hempel of Pershing explains some new choices.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

CFPs, including brokers, may have to adhere to a stricter fiduciary duty

CFP Board revises its standards and aims to beef up fiduciary requirements of certificants.

CFP Board's proposal to expand fiduciary duty draws praise, carries risks

Some question whether brokers will drop the CFP mark or if the CFP Board will strictly enforce its new standard.

Meet our new 40 Under 40s

Introducing 40 young leaders in financial advice. Learn how their passions are driving their success and fueling the future of the industry at large.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print