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Subcommittee Conducts Oversight of SEC’s Division of Investment Management

Washington, Oct 23 -

The Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee held a hearing to examine the Securities and Exchange Commission’s (SEC) Division of Investment Management . The Division of Investment Management is responsible for the SEC’s regulation of investment companies, variable insurance products, and federally registered investment advisers.

Subcommittee Chairman Scott Garrett (R-NJ) said in his opening statement, “As part of our oversight responsibility, this Subcommittee will be closely monitoring the SEC’s actions in this area to ensure that they actually reflect the SEC’s three-fold mission and are not simply ad hoc responses to threats from other regulatory bodies. Additionally, I am eager to hear today about the Division’s work regarding Section 913 of the Dodd-Frank Act and the Department of Labor’s fiduciary rule, as well as efforts that the Division is undertaking to promote capital formation.”

Key Takeaways:

• The SEC must continue to assert its jurisdiction as the primary regulator of the asset management industry and should not have its agenda set by prudential regulators or unaccountable bodies such as the Financial Stability Oversight Committee (FSOC) or the Financial Stability Board.

• The SEC must better prioritize how it uses its limited resources, including prioritizing the examination of investor advisers over other initiatives that fall outside the scope of the SEC’s mission.

• Although its mission includes the promotion of capital formation, which the SEC acknowledges “is necessary to sustain economic growth,” the SEC has done little in recent years to improve the environment for capital formation.